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Am I a gold investor now? Ready to see the light and accept the heavens’ gift to mankind as a store of value?

No. The answer is no.

No matter how I contort my intuition or try convincing myself owning gold is a good idea, the metal just comes up short for a couple of reasons.

~

Check out Part 2 here-

Poor long run CAGR return

Through all of 2025, gold bugs were touting their superior CAGR (Compound Annual Growth Rate). Gold was outpacing returns of the S&P500 despite AI gains and technically this was true in a short run 3 year window. When an asset jumps 125%+ in a single year, you’d hope it looks impressive.

In a longer term reality, gold was just sprinting to catch up to the pack. Over any longer period of time, gold does not win. Even during two massive 50% equity declines during the 2000s, gold essentially tied equities for annual returns.

Include dividends and gold falls further behind over time. No thanks.

What Safety?

On the other hand, some would say gold is not about returns. It’s about capital preservation and safety. Ok, but safety and preservation from what exactly and how?

Economic safety in any reasonable context (including a financial crisis) within the U.S. can be matched with treasury holdings or FDIC insurance for deposits. An international country with capital controls aiming to prevent exodus or confiscate gold will surely be checking your FEDEX package leaving the country for any gold bars. So that plan is out.

In a crazy post-apocalyptic economy where the U.S. defaults or the dollar fails, I guarantee people will care more about food, water, fuel, internet, and safety than yellow rocks. The best thing it’d be good for is knocking someone over the head.

Furthermore, storage is a bitch and gold is heavy. In any natural disaster or flood scenario requiring evacuation you’re fucked. Think the Coast Guard rescuer hanging from a rope is going to let you haul up 75lbs of gold to his rescue chopper?

In World War 2 Narrated By Tom Hanks, we see the Germans confiscating physical gold by force when they physically invaded Poland, the Netherlands etc. Are you going to fight off the Germans to keep your gold bars safe when SHTF?

You’d WANT assets digitized and guaranteed. By weight alone it makes sense. Which brings us to crypto.

Bitcoin/Blockchain

Like silver before it, bitcoin and its blockchain made claim to being a competitor store of value and medium of exchange. I’m not saying bitcoin is digital gold. Bitcoin would make for poor jewelry.

I am saying bitcoin has utility as a network layer tool in ways gold does not but also has the universal absolute fixed supply attribute going for it like gold.

In the coming years, capital may move more permanently out of gold and onto bitcoin because the blockchain network makes for an excellent, standardized currency for soon-to-be e-commerce focused AI agents.

The agents could act with their own bitcoin wallets while ledgers and smart contracts keep security and audits tight. (Starting to learn about the Lightning Network). Any transaction made off-chain could be voided, removed or corrected instantly.

Asteroid mining

Remember the ancient asteroids with gold in them? A day will come when it’s possible to mine the asteroids with gold deposits and transport minerals back to earth. This would totally change the fixed supply dynamic making gold closer in value to aluminum foil or steel paper clips.

Now obviously, this is still a long way off in the future but is it so crazy to ponder gold usage hundreds of years in the future when we’ve been highly valuing it for 2500 years already?

As ZeroHedge likes to say, “On a long enough time line, the survival rate for everyone drops to zero.

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Conclusion

Look gold is nice. It’s cool looking, slightly mysterious, and every adventure story suggests its a treasure to be sought after. But it’s a hunk of metal. The pet rock of investments. At least Bitcoin has a built-in accounting function.

Gold will of course continue to be pitched as part of investment portfolios and as safety nets in the event of upheavals or economic disruptions. Honestly, if I were an “untouchable” manual laborer in India or a pimp in Reno then keeping some gold around is probably smart.

But I’m a white guy from New Jersey with a degree in Finance — so I’m an owner of equities and US fixed income over gold in any medium run scenario.

For more thoughts on this idea check out some of the archived posts.

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In my ponderings on the mystery of gold and the question “Why do we use gold?", I popped open a can of snakes made from devilish questions concerning this metal we’re all so fired up about owning in this modern world.

So as each additional question sprung up, I really tried to apply some first principle thought while staying pragmatic on the nature of gold in 2026. Fair warning- parts gets a little Neil DeGrasse Tyson - style trippy.

~

And check out Part 1 here-

What is gold?

Gold is an element. A bright-metallic-yellow, dense, soft, malleable, and ductile metal. AU on the Periodic Table. Good ol’#79 from High School chemistry class. Ask a scientist what’s unique or valuable about gold and they will tell you: It conducts electricity, it does not rust, it maintains its luster, it’s easy to isolate and collect from mined ore.

Ask a financial professional the same question and they will say it’s a store of value or hedge against inflation in a portfolio.

Ask that same financial professional to elaborate or prove why those assertions are true and you’ll quickly see the limits of their proof of knowledge.

Where does gold come from?

Gold comes from the ground via mining operations but it really came from space in the form of ancient meteorites pummeling the earth 2-3 billion years ago. South African gold mines? Ancient asteroid strike. California Gold Rush? Ancient asteroid strike.

Space is the only true source of new gold supplies. (I’ll come back to that idea). For 1000s of years, alchemists tried and failed to turn lead or other base metals into gold with a pseudo-process called Chrysopoeia. (Not to be confused with modern Financial Alchemy)

Interestingly, in modern times one may ask: If we can make plutonium and other radioactive elements in a lab, why can’t we make gold in a lab? Like diamonds or pearls.

Glenn Seaborg successfully transmuted bismuth into gold in 1980 in a collider experiment. He literally fulfilled the alchemist goal.

Problem is gold only has one stable isotope: Gold-197 but when you smash atoms together, you often end up with unstable isotopes. This means the lab-grown gold is frequently radioactive and dangerous to handle. It also costs around one quadrillion dollars per ounce to produce gold this way. So, while we can make it in a lab, you're better off waiting for another asteroid.

How much gold do we have?

As of September 2025, the world holds approximately 218,000 tonnes of mined gold plus 64,000 tonnes in proven reserves and 132,000 tonnes in miniscule deposits —a total endowment of about 414,000 tonnes.

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OK….so then….

Who holds gold?

Private citizens and investors mostly.

• Jewelry: ~44% (approx. 97,650 tons). The largest single share of the world’s gold is privately owned by individuals in the form of jewelry with some cultures adopting private ownership as a store of wealth for various reasons. Indian households alone are estimated to hold around 25,000 tons of gold in jewelry—more than the combined national reserves of the United States

• Private Investment (Bars and Coins): ~21% (approx. 46,950 tons) is held in the form of physical bullion (gold bars) and coins. Combined with jewelry, this means that ordinary people privately own roughly 65% of all the gold on Earth.

Central Banks and Governments ~18% (approx. 38,670 tons)

• Governments and central banks hold gold in highly secure vaults as a strategic foreign reserve asset to hedge against economic instability, currency devaluation, and geopolitical conflict. The United States holds the largest single reserve by far, with over 8,100 metric tons stored in places like Fort Knox.

Technology, Industry, and Unaccounted: ~15% (approx. 32,700 tons)

• This is straightforward. Gold is useful as an industrial component for electronics, wiring, and other special purpose use cases.

Where do I get gold?

Depends on how you want it served to you.

Most traditional jewelry stores mark up gold jewelry by 100% to 300% above the actual “melt value” (the intrinsic value of the raw gold) making jewelry for investment purposes a terrible idea in the short run.

Rick Harrison, of reality TV show Pawn Stars, confirmed due to the nature of civil asset forfeiture, pimps would intentionally buy heavy gold jewelry from pawn shops rather than retail jewelry stores. They did this because they knew a pawn shop would typically loan them exactly half of what they originally paid for it, giving them a predictable, wearable insurance policy for when they inevitably needed bail money.

For physical gold bars, Costco allegedly has a good value with only a 2% average markup and follow the Good Delivery specification rules issued by the London Bullion Market Association (LBMA) describing the physical characteristics of gold and silver bars used in settlement in the wholesale London bullion market.

In other words, Costco gold is legit.

What do I do with my gold once I have some?

Look at it. Hide it. Swim in it like Scrooge McDuck? Gold is the pet rock of investments. It will just sit there. We can check back later if anything changed I suppose. I’ll need to think about this question more.

Ok - I have a handle on what gold is, why people use gold, what it’s used for and where I could get some so next week we can finally answer the last question - how much gold do I want?

For more thoughts on this idea check out some of the archived posts.

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Gold - both as a metal and a psychological anchor - is so deeply embedded in human history it’s essentially taken for granted. Think of all the things society associates with gold. Wealth, Religion, Power, Industry, Trade.

Why?

I mean, really, why? Why does gold appear equally intriguing to people in 3000 B.C.E. as it does in 2026 C.E. ?

Across most cultures, despite millennia of technological innovations, universal economic & productivity growth and an infinite list of physical and digital consumer goods available, there is still some value attributed to having gold. But for what purpose exactly?

As spot gold prices continue their pullback after an epic 18 month run, I’ve been thinking more and more about why anyone would want gold? Who holds gold? How much gold is the right amount of gold to have? Where do I get gold? What do I do with my gold once I have some?

The answers were not as obvious as I thought it’d be.

The Golden Rule(r)

One of the first lessons I was taught after joining a trading firm goes like this:

It’s true. Think of anything in the world. What’s it worth? The answer is likely expressed as $US Dollars or maybe as another currency. But what is that currency worth?

Well you might try to quote the EUR/USD FX rate to define a dollar in euros. But what is a Euro worth? Round and round the circular reasoning would go.

Now, you might otherwise say US Dollars are a fiat currency and therefore the printing press at the Fed will devalue it over time making a dollar barely worth the paper its printed on.

OK, but what is that paper worth then? Somebody cut down trees and manufactured it. You’d probably have to say printed paper is worth less than a blank piece of paper because the paper is now dirty with green ink. Yet given the choice between a crisp $100 Bill and a blank rectangular piece of paper, I’d choose the $100 bill. So I’ll ask again —what’s a dollar worth?

You could of course measure something of value in terms of time. Or some other bullshit thing like “love” or “faith” but terms with boundless subjectivity make for poor measuring sticks.

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Enter Gold.

Gold was selected as an early currency in the ancient world because it perfectly balances unique chemical and physical properties that make it an ideal store of value and medium of exchange.

Unlike other elements, it doesn’t corrode, its easily identifiable, cannot be counterfeited easily, and is scarce enough to hold value without being so rare that it prevents commerce.

Gold offers an economic absolute measurement mechanism. Because it cannot be artificially printed or destroyed, it acted as the literal foundation for global currencies (the Gold Standard).

In physics, the speed of light (c) is the absolute speed limit of the universe giving astronomers a unit of measurement: the lightyear. The distance light will travel in 1 year. Gold allows for a similar some form of comparison across economic dimension.

It’s actually an important idea.

For practical purposes, it creates a society who understands there is only a fixed amount of gold available and the society basically trusts that the known value is accurate. You can’t eat gold, You can’t burn gold for warmth. Gold doesn’t rot. It just sits there.

In this model, it's a universal standard to measure everything against. Either by weight or volume, Gold could set the price via how much you’d surrender in trade for something else because you weren’t getting anymore gold in the closed system anytime soon.

Amazingly, for awhile, this idea basically worked in most places. With the occasional Butt-in-ski of silver as a knock-off copy-cat, a gold reference point was in place right up until it wasn’t. 1913 Fed creation, Bretton woods agreement, 1971 Nixon shock yada yada yada this is not a rehash of the gold standard argument.

It’s actually more childish and primal. For 5000 years, the world played a continuous game of Capture The Flag with a Hungry Hungry Hippos flair. The logic went - every group needs some way to measure their strength as a tribe right? and we know there’s only so much gold, so let’s say who ever currently holds the most percentage of all the gold is the (Golden) Ruler or the world.

Not because they have gold—-because they devise the tech, manpower and smarts to prevent anyone from taking the gold away.

Modern Gold Exposure

Today the odds of a raid on Fort Knox for the U.S. gold stash is low. Which is sort of the point.

In ancient times, you’d literally sack the city and take the gold like winners of Capture the Flag. Right up until the surrender of Germany and Japan in World War 2, pure looting of physical metals as part of the spoils of war was common.

But it is 2026 - markets have evolved. You can now own or trade gold in more ways than ever. Spot gold, futures contracts, mining stocks, gold ETFs, buying commemorative gold coins with Americana stamped on it from the back page of an AARP magazine. But like valuing a dollar, it begs the question, what are you actually buying and is it worth owning?

So, in 2026 when someone says they’re buying gold for safety….what the hell does that mean?

Next week- a little more about what makes Gold….Gold and what Gold definitely does not do to help its owner.

For more thoughts on this idea check out some of the archived posts.

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This week I’m happy to share my sit down with Bud Leiser on the Time Compass Show. Bud is a trader, investor and macro enthusiast. I join the show for a lively debate on gold, mining stocks, rates, US debt, and what’s really driving markets in 2026. Check out the Time Compass Show on Youtube and subscribe for more of Bud’s gold and silver analysis and content.

About Time Compass

“A compass for leaders navigating uncharted waters.”

Time Compass is where visionaries, thinkers, and changemakers come to share the stories and tools that shaped their path. Hosted by Bud Leiser, each episode captures transformative conversations—rooted in personal growth, business wisdom, and conscious leadership.

Whether you’re scaling a company, pivoting your purpose, or seeking clarity in chaos, this podcast offers grounded insight and expansive thinking to guide you forward.

► Instagram: [@timecompass25]
► TikTok: [@timecompass1]
► Follow on X: [@budleiser]

Check out his website here!

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For more thoughts on this idea check out some of the archived posts.

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traderdads@substack.com

While Boston was being overrun with Scottish World Cup fans, I found myself in Edinburgh for the Scotland-Morocco game. Enjoying a pint at the hotel bar were among others- a German sightseeing tour, some Irish teenagers, Americans on family vacation and a Hotel manager who hailed from Spain.

Despite the eclectic group, paying for the next round of drinks was as simple as tapping your credit card. Efficient? Yes. Cultured? Hardly.

My main disappointment of our Euro trip was the lack of foreign currency floating about to keep as souvenirs or to pay for day-to-day expenses. The issue is two fold:

1. The Euro replacing legacy currencies in 1999

2. 21st century electronic payment processing

Before we left, I had to call Visa to make sure my International conversion setting was turned ON. That's it. For all the uber rides, bar tabs, souvenirs and tourist trap entry fees I paid, I never touched physical foreign currency the entire trip.

US Dollar strength has rebounded as of late after a freefall in 2025. EUR/USD is sitting around $1.13, and the British Pound (GBP/USD) is hovering near $1.32.

Still, every pint of Guinness in Dublin and every dram of Scotch in Edinburgh carries a ~16% to 34% premium before you even add a tip due to FX exchange.

But I get it. Modern ways are faster, safer and smoother. It’s still a bummer. Tons of culture lost or forgotten. In no particular order, some things I miss about using coins and paper bills.

—The crazy conspiracy theories about the symbolism on coins or bills

—Nerdy worthless commemorative coin collections

-Flipping a coin to decide “Who goes first”

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- Flipping a coin leaning against a wall to look aloof and mysterious

- Tipping the valet and staff like you’re right out of Goodfellas or Casino

-You can feel like a baller when you mention dropping 13,000 Yen on drinks at dinner last night for the client ($80)

-Paying for literally anything with just a single coin and walking out the door.

-Knowing the country-currency pairing of old is great Bar trivia.

• Austria: Austrian schilling

• Belgium: Belgian franc

• Finland: Finnish markka

• France: French franc

• Germany: German Deutschemark

• Ireland: Irish pound (punt)

• Italy: Italian lira

• Luxembourg: Luxembourg franc

• Netherlands: Dutch guilder

• Portugal: Portuguese escudo

• Spain: Spanish peseta

• Greece: Greek drachma (Joined 2001)

• Slovenia: Slovenian tolar (Joined 2007)

• Cyprus: Cypriot pound (Joined 2008)

• Malta: Maltese lira (Joined 2008)

• Slovakia: Slovak koruna (Joined 2009)

• Estonia: Estonian kroon (Joined 2011)

• Latvia: Latvian lats (Joined 2014)

• Lithuania: Lithuanian litas (Joined 2015)

• Croatia: Croatian kuna (Joined 2023)

For more thoughts check out some of the archived posts.

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TRADERDADS MAILBAG

traderdads@substack.com

New post next week but in the mean time check out an early archived series from 2023.

Using Jim Collins’ classic book Good To Great on corporate excellence, I use the principles to apply to parenting in modern life.

The idea was simple enough.

Good To Great was assigned literature in many Corporate Finance undergrad courses in the mid 2000s. The framework has become well respected in management theory circles and blogs but lets be honest— most of us were never going to be a CEO to apply the concepts so directly or overtly in our careers. This was the type of thing we learned about as a theory (Assuming you actually read the book).

So, since I’m not now nor likely ever to be a CEO of a large corporation to instill Greatness, then can these ideas be applied at home so that the time and effort was not just for theory sake?

The Verdict: Ehh Kinda.

Some analogs worked better than others.

• I think the Level 5 Dads ideas holds up after re-reading it again

• First Who/ Then What became an abstract mind gymnastic to make work.

• The hedgehog concept ended up a giant setup to a Chris Rock joke punchline.

• The Flywheel concept is great and I really believe it’s important to understand and for applying to other areas of life

At the end of the day, I think applying management theory ideas to family life CAN work as an idea but it needs a lot of polishing, tweaking and shoe horning otherwise you’re just plain psychotic (Parenting via Corporate America Management Books sounds awful)

Enjoy.

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In service of Father’s Day coming up this weekend, let’s have some fun and figure out how the Corleone Family built their empire and determine just how wealthy The GodFather Michael Corleone was at his death in 1997 per the movie’s timeline.

Drawing on both the movies and Mario Puzo’s original books we know it was entrepreneur and patriarch Vito Corleone who started the family business. Michael would not take over as head until the 1950s, nearly 50 years after Vito began.

However, it was Michael who ultimately generated the explosive (no pun intended) growth in the mid and late 20th century with a mix of legitimate and illegitimate deals as well as some other savvy investments.

Adjusted for inflation, Gemini estimated the Corleone family net worth at Michael’s death would easily be in the $3 Billion to $5 Billion range—operating essentially as a shadow private equity firm for all manner of business ventures.

A timeline and some thoughts -

Vito’s Foundation

1910s–1940s

Vito's first real job in New York was working honestly as a clerk, saving a few pennies here and there, at a neighborhood grocery store owned by the father of his friend, Genco Abbandando. After losing his job, Vito partnered with Peter Clemenza and Salvatore Tessio. They started by stealing dresses & textiles then later moved on to hijacking trucks and fencing stolen goods. Grinding out a living day to day.

Eventually, after eliminating competition from Don Fanucci, Vito began his own rise to power. He essentially becomes a cross between a small claims court judge and an Angel investor in the neighborhood generating the political and financial capital he’d need along the way.

1920 - Genco Pura Olive Oil Company

The Corleone family opened Genco sometime in 1920 to manage expansion. This wasn’t just a front; it was a legitimate cash-flowing business that provided supply-chain logistics for the illegitimate business (smuggling).

Between the legitimate profits from becoming the largest olive oil importer in the United States and the illegal operations running quietly behind the scenes, Vito became incredibly wealthy. By 1922, Genco Pura is already highly successful and serving as the financial bedrock of his power.

Genco Abbandando was Vito’s best friend growing up and his original consiglieri. Puzo tells that he died offscreen at the beginning of the original film, which is why Michael comments on the honor of Tom Hagen being made consiglieri to replace him.

1945 - The Pivot

In The GodFather film, Vito refuses to finance Sollozzo’s new narcotics operation.

His thesis is pure risk management. His political capital (the judges and politicians) would dry up if he touched drugs so he chooses preservation of capital over speculative yield chasing on an untested market. Suddenly, He’s Warren Buffett!!

“Problems” come and go but ultimately Michael settles all the family business and is left in charge to continue forward.

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Michael’s Stewardship

1950s–1960s

1955- Vegas & Casinos

Michael takes over the transition from “blue-collar” New York street crime to white-collar corporate raiding and political lobbying by shifting the family out of NYC union rackets/protection and into Nevada gaming. This is the equivalent of moving from low-margin retail to high-margin SaaS. It scales infinitely and generates absurd daily liquidity.

1959 - Cuba

Michael’s attempt to partner with Hyman Roth in Cuba is disrupted by the overthrow of the Batista government to install the Castro communist regime. This wipes out the entire business stake overnight and becomes a rare financial loss for the Corleone Family.

1979/1980s

Later in life, Michael attempt’s to take the family fully “legit” via the Vatican Bank and the Immobiliare real estate deal. Michael deposits $600 million into the massive European real estate conglomerate.

The Immobiliare deal is successful. With the corrupt opposition wiped out and the paperwork ratified by the Pope, the Corleone family officially gains controlling interest in the $6 billion European real estate conglomerate. Michael achieves his lifelong goal of securing vast, completely legitimate wealth for his family.

1990s

Adjusted for inflation, the Corleone family net worth at Michael’s death in the 1990s would easily be in the $3 Billion to $5 Billion range—operating essentially as a conglomerated private equity and real estate firm with many diversified lines of business. Despite his financial success, Michael dies alone reflecting on choices he made and the costs to accrue such wealth and power.

For more thoughts on this idea check out some of the archived posts

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Everybody Loves Charts!

• Longer term trends in the markets and economy.

• Extra details on what seems underappreciated or overhyped.

• Link to some great explainers on the concepts.

**Everything as of 6/6/2026

Did anyone catch the license plate of the truck that ran over everyone Friday (6/5)?

Admit it, at some point over the weekend a part of you thought: ”Oh Shit! is this it?” Is this the top and the AI trade unwinds like Bitcoin? Down 50% by Labor Day?

Of course, by Monday we knew it wasn’t the end. Just some pressure release and profit taking after a mighty 2-month rally. But how do we know for sure the next time won’t be the end? Will every 2% decline now scare investors into rushing to the sidelines?

I recently came across two compelling theories on how to model the AI Bubble mechanics and what to watch for before the crash to help understand what’s driving the upside and what may ultimately undo it.

Still a chart technically

#1 - An Earnings Bubble

I came across a summary note by Peter Berezin, Chief Global Strategist at BCA Research, on how to model the current AI market valuations. He offers a different perspective on the valuation drivers than I think many people picture in their heads.

Generally speaking, when people think of a bubble they think of Price. P/E ratios at , 60, 80, 100 or even higher for companies that are losing money yet are still being a bought up by speculators or passive funds. (Pets.com, Webvan etc.) People driving up the “P" side to bubbly levels.

Berezin asks “What about the “E” side?

AI hardware producers are booking huge profits on their sales, whereas their customers are largely treating the purchases as CAPEX. In other words, one and done sales that will not translate to ARR - Annual recurring revenue.

Zero people should look at those ballooning numbers and think: “Obviously this is the new norm”. Alas, this spike in earnings along with price keeps the P/E Ratio from generating those traditional red flags and fails to highlight the risk of orders drying up once the product need dwindles. How’s your Peloton and Moderna stock doing Post-Covid?

A similar situation permeated Housing and Bank stocks leading up the GFC. All those mortgage origination fees and CDO origination fees goosed up the “E” keeping the forward P/E ratio for banks within a fairly tight range of 11 to 13 between 2004 and 2006. Revenue finally declined in 2007 and by the first half of 2008, investors increasingly soured on the sector. (That’s putting it politely)

So with an earnings bubble, in the moment the price paid makes sense. Sales and profits ARE white hot. However, as soon as the fad or build-out runs it’s course, earnings revert to the older, original mean. Prices adjust too of course. Just to a much, much lower equilibrium.

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#2 - Rising Complexity

Last week Matt Levine from Bloomberg tried to describe the newest gimmick structure to satisfy Anthropic and Google’s financing needs while still keeping a AAA grade on the deal structure. Honestly, I had to ask Gemini to clarify the sequence.

The Interactions & Flow of Cash-

Phase A: Funding & Purchasing

1. Investors Apollo and Blackstone send $36 Billion in Cash to an SPV.

2. SPV sends $36 Billion in Cash to Google.

3. Google delivers Custom TPU Chips to the SPV (The SPV now owns the chips).

Phase B: Operations & Lease Payments

1. SPV leases the TPU Chips to Anthropic.

2. Anthropic makes steady Lease Payments (Cash) to SPV.

3. SPV uses that cash to pay Interest & Principal (Cash) to Investors.

Phase C: The “Chip Put” (The Worst-Case Scenario Guarantee)

If Anthropic goes bankrupt and stops paying its lease:

1. SPV reposesses the chips and sells them on the open market for Cash to Investors.

2. The Guarantee: If the used chips sell for less than what the investors are owed, Broadcom steps in and pays the Shortfall (Cash) to Investors to make them 100% whole. (In exchange, Broadcom is paid a premium for renting out its investment-grade balance sheet).

So now Broadcom, a supplier of Semiconductor Solutions and Infrastructure Software, is in the insurance game. I’m not saying Broadcom is being setup to take the fall on this plan down the road, but the need for rising complexity and guarantees to make deals appear safe and profitable is the first red flag I’m seeing that risk is starting to hide in weird places to keep fees flowing.

But it’s fine. Broadcom will never have to pay. When have consumer electronics ever depreciated due to a new model arriving on the market or a change in tech? Nokia or Blackberry probably know. Let’s ask them.

For more thoughts on this idea check out some of the archived posts.

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As if investors in their prime for growing wealth need another thing to worry about in the world, a subtle long term structural rotation (money shifting gear) is taking place in capital markets which could become a surprise accelerant for any short term pullbacks in this AI-dominant equity market.

• The rotation I’m thinking of is the Baby Boomer generation selling equities in their portfolios in favor of retirement fixed income.

• The accelerant would be their slow, constant and manageable trickle of equity selling igniting into a chaotic and exaggerated sell-off in the event of an unexpected catalyst or fear baiting.

Think of adding black ice to a car slowly going down a driveway. A normal manageable situation suddenly becomes a panicked jolt of overreaction before the driver comes to their senses and regains control.

A 5-8% healthy correction devolves into 10-20% bear market crash before recovering swiftly for no fundamental reason other than this cohort’s fear of being caught in a Tech Bubble 2.0 Burst right before they take the leap to fulltime retirement.

If a panic sell-off by retirees does occur in the near term, it would be a longer term buying opportunity for those prime investors (Millennials/Gen Z) to catch a Flash Sale of some of the highest potential names of the next decade or two.

Long-Term Structural Rotation

We are in the midst of a longer term trend of de-risking among the Baby Boomers. We officially hit “Peak 65” in 2024 (where roughly 12,000 Americans turned 65 every single day) but a long tail still exists to continue the trend. By 2026, the leading edge of the Boomer generation will be hitting something called their Required Minimum Distribution (RMD) age (73 to 75).

This isn’t voluntary selling; this is statutory selling. Thanks to the SECURE 2.0 Act, the starting age for RMDs is currently 73. (It will increase to 75 in 2033).

The IRS is forcing trillions of dollars out of tax-advantaged, equity-heavy 401(k)s and IRAs to be taxed and spent on healthcare, golf, and grandkids.

This is a persistent, structural headwind for equity valuations but manageable under normal circumstances as Millennial buying contributions absorb the Baby Boomer selling.

The easiest way to manage this shift is by using Target-Date Funds or Lifestyle Funds, which automatically adjust your portfolio mix as the target retirement date approaches.

Target Date Funds (the default investment vehicle for modern corporate 401ks) automatically rebalance their portfolios, silently selling equities and buying bonds. This happens under the hood, stripping equity demand month by month.

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Short Term Chaos

In the short term (1-3 years) we are sitting in a bizarre macroeconomic window where the Equity Risk Premium (the excess return you get for holding stocks over risk-free bonds) has been historically compressed thanks to the AI-fueled MAG7 run.

Smart money is now looking at stretched equity multiples (P/E ratios) and realizing they can lock in perfectly respectable, compounded yields in the fixed-income market. It’s a classic rotation: harvest equity gains, lock in bond yields.

Corporate bond issuance have also been surging as companies build out Datacenters and generally look to issue new working capital at reasonable rates before the Fed comes in to clamp down again should inflation re-emerge.

So, what happens if they all run to the door at once? That manageable consumption of selling pressure will overwhelm the buy side creating an exaggerated drawdown until both groups find an equilibrium.

A temporary glitch to be sure, but a jolt to anyone’s 401K and a constant possibility over the next decade. So make sure you have that cash allocation to weather the storm and to capitalize on any flash deals in the market. Withdrawal is coming.

**Game of Thrones

For more thoughts on this idea check out some of the archived posts.

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Trillions of dollars are being vacuumed up for AI buildouts. It’s driving returns for retirement savings, college savings, EPS growth, and job growth. AI relentlessly consumes capital, electricity, raw materials and investor attention. Most troubling, we are all just ants scurrying about hoping to avoid being stepped on while maybe nibbling on some crumbs that fall to the ground in the form of strong ETF returns.

So in an environment where the entire economy is a single wager which you have no control over the outcome, how do you manage your own portfolio and financial security?

2026-2029

We can’t predict if and when a specific threshold finally breaks the camel’s back on AI debt. We know we’re not near the top yet as the datacenters and realized revenue will not start to emerge until 2028-29.

Until then, enjoy the ride! The NASDAQ famously doubled in 1999 prior to the 2000 crash. Maintaining some exposure to equities is necessary if you plan to capture any gains.

2027 should also see the IPOs of several AI providers and other tech behemoths. Anthropic, OpenAI, SpaceX are all charting an IPO strategy to raise, ironically, more cash for datacenter build outs. Their near term EPS growth, sheer market cap size and allocation demand by ETFs and institutional investors should continue the tailwind for equities for awhile longer.

Crash Protection

Eventually, the bill comes due.

Hopefully, I’m wrong and AI is the salvation we’ve been waiting for all our lives. But in the unlikely event this time really is different, at some point there will be real pain.

Millennials in particular will be at a dangerous cross road. As of 2026, the weighted average age of a U.S. Millennial is approximately 36 to 37 years old. putting them at 40 by 2029 and at the inflection point of still being positioned to capture the high returns of equities while slowly but surely losing the timeline to recover in the event of a market crash.

The “110 Minus Your Age” Rule

This is the standard formula for dynamically shifting your investments as you get older to manage risk.

How it works: You subtract your current age from 110. The resulting number is the percentage of your portfolio that should be invested in equities. The remainder should be allocated to debt, bonds, or cash.

Example: If you are 40 years old, you subtract 40 from 110. Under this rule, 70% of your portfolio belongs in equities, and 30% belongs in debt and fixed income. By the time you hit 65, your allocation shifts to 45% equities and 55% debt

By 2028-29, it will be critical to consider easing back on the risk . I’ll be watching yields on the 10 year and 30 year notes for opportunities to nudge some savings over at a nice yield a bit earlier than normal. This should help protect any bonanza gains in tech. An above average cash allocation for bottom feeding the survivors after a 30-40% crash may look smart in hindsight as well.

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What will the 2030s look like?

The good news is history tells us a market crash does not equal death as long as you survive the fall. Even Cisco has recovered and surpassed it’s peak valuation of the 2000s bubble.

On the contrary, the AI compute infrastructure will continue to exist for productive use. Opportunities will pop up at great valuations. New ideas and business models will emerge from the rubble.

I don’t know exactly how that recovery will look or impact us but as sure as I am the foundation of the AI buildout may crack under it’s own weight in the coming years, I’m equally sure if you can survive the fall, you will be able to fight another day to ride the recovery up the next wave.

For more thoughts on this idea check out some of the archived posts.

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Could 21st century blue chips like MSFT, ORCL, META, AMZN or GOOG really run out of cash and default on hyperscaler loans? Microsoft’s credit rating is now better than the U.S. Government. Most of these companies have rock solid cash cow products like Office 365 subscriptions or advertising revenues that are unlikely to be disrupted soon.

Yet, even massive companies have a limit on the amount of cash available to service debt payments. The outcome hinges on what the actual capture of AI revenue will be from Enterprise clients building their AI infrastructure atop the hyperscaler foundation.

Token Management or AI 101

A lot of terms get thrown around when it comes to the business of AI. Hyperscalers, tokens, GPUs, LLMs, weights, TPUs etc. What are you buying exactly when you pay an AI bill?

Behind the ChatGPT prompt window or any other AI model is a process called tokenization. A token is the basic unit of data that an AI model processes.

Depending on the specific “tokenizer” used by the AI, an input like a question will be broken down into some number of tokens. The tokens are submitted into the model. The model outputs an answer as tokens then reconfigures the output for human consumption. A good "back-of-the-envelope" estimate is 1,000 tokens are roughly equal to 750 words. Images, pdfs, audio, video all have average token counts with generally higher token counts as the file grows.

AI services (like ChatGPT or Google Gemini) charge users based on the number of tokens generated or processed under their account.

An Enterprise would be charged a bill based on the token utilization rate quoted by their hyperscaler. The billing model is very similar to how KwH are clocked and billed by the electric company today.

Google’s Gemini average token utilization is now more than 16 billion tokens per minute via direct API and the overall forecasted token demand across platforms runs into the 100 quadrillion+ per month by 2030 according to some optimistic folks who coincidentally have some hyperscaler bonds they want to sell you.

Now, you may be thinking, I pay $20 / month for ChatGPT. No one mentions tokens. And you are right. But for business reasons. Not technical.

Hyperscaler Business model

Most are familiar with a ChatGPT subscription for $20 a month. This is a loss-leader model. It’s a common strategy in Silicon Valley to hook the user early on, then lock-in their loyalty and raise prices down the road for the deluxe model. Think Uber subsidizing ride prices back in the 2010s to encourage adoption.

In reality, the majority of ChatGPT users are using less than $20/month worth of tokens and their subscriptions subsidize the few “Power Users” who find $20/month a bargain.

Enterprises like banks, SaaS companies, Pharma, law etc. etc. will negotiate a straight utilization contract for their expected token consumption.

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Good Credit Goes Bad

Failure is an option when making such a large bet on a new paradigm of IT spend. Remember The Metaverse or VR goggles? Busts. What could go wrong here?

Any number of SNAFUs could derail the cashflow projections leaving a major debt problem. Hyperscalers are assuming an immediate and full adoption of tokenized workloads by enterprises and at a cost for them that creates value and expanding profit margins. That’s the only way the debt levels can be sustainably repaid.

If the chips don’t get delivered on time for usage, there’s a debt problem. If demand doesn’t come through from Enterprises, there’s a debt problem. If regulations change, there’s a debt problem. If geopolitics gets hot over AI, there’s a debt problem.

So What if…. 6-12 months after implementation, AI deployment is still a cost for enterprises and not a productivity multiplier ?

If the upfront investments and internal training required to transition to a productive agentic-first working model are far bigger or take longer than companies expect, contracts will not be renewed or flat out cancelled by enterprise companies.

Imagine tasks done by a $100,000/year employee whom you thought was being replaced by just $50,000 in token costs. Only to find out the tasks actually now cost $150,000 per year. Higher than expected token costs, low quality prompt and harness engineering or just AI slop forces the human to stay in the loop to meet standards and perform evaluations.

Fallout

If sales from token consumption fails to generate the necessary revenue, there are only 3 options for the hyperscalers:

• Free up cashflow by laying off workers/selling assets/cancelling other projects to make debt payments

• Refinance or re-structure the bond issuances

• outright default

None of these options are pretty and all would be painful to the broader economy.

For more thoughts on this idea check out some of the archived posts.

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2026 continues apace with headline risks & innovation announcements pumping out so frequently, the market seems to have simply gone numb and fallen back to a traditional “Up and to the Right” mentality from tech.

Tech’s earning calls reported stellar Q1 revenue and upbeat guidance going forward. Semi-conductors (SOX) led the way with strong booked sales while the hyperscalers —massive cloud computing providers like AWS, Microsoft Azure, and Google Cloud— are readying for the baton pass. Most hyperscaler providers are forecasting immense sales growth once they deploy all those semi-conductor products they purchased. The plans bring new AI Compute datacenters online through 2028. So far so good.

Hyperscalers aim to launch that expanded datacenter capacity to service their forecasted demand for AI compute — the calculations done by an AI model to generate the image, video or text answer to your prompted questions.

When measured in the form of AI Compute (token) utilization, hyperscaler companies signaled an insane 40% QoQ earnings growth rate — with multi year consistency at that level expected as well.

Therefore, since companies believe in these growth numbers & that AI will soon be all powerful and all encompassing in the economy, they plan to build, build, build to service these new customers. And Tech is trying its hardest to pay for it all along the way.

The trouble is, it’s still difficult for many to trust these off-the-charts growth rates will be sustainable. If, down the road, AI compute demand falls short of expectations, then hyperscalers will still be on the hook to the investors’ of all this infrastructure. With little revenue to show for it all, what happens then?

Where the AI cycle stands

To understand the current cycle and sentiment of the AI boom, we can use the NASDAQ Composite index as a historical benchmark and parallel. (Any infrastructure buildout cycle could be used to similar results).

Let’s set the cycle starts as the launch of Netscape Navigator in 1994 for the Dotcom Boom and the release of ChatGPT in November 2022, kicking into high gear in 2023 for the AI Boom. By this measure, we’re about halfway through the AI bull run and crucially, not yet to the froth and blow-off top of the cycle.

Much like the massive physical infrastructure buildout of the 1990s internet boom, massive AI datacenter investments are propping up today's economy. But while the dotcom era drove >20% of economic growth, the AI boom is far more extreme.

In Q1 2026, AI infrastructure accounted for 1.38% of the 2.0% total real GDP growth—meaning this single sector drove nearly 70% of the broader economy.

This means the U.S. economy and big name Tech companies are All-In on AI computing power being a successful business venture providing major productivity growth.

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Pay to Build

Remember all those semi-conductor products the hyperscalers purchased from chip manufacturers? Well, they’re expensive. Very expensive. Over $1Trillion is expected to be spent through 2027, which should keep the economic engine running for awhile on paper. Still so far, so good.

But here’s the catch. That $1Trillion+ is being paid for with debt. Corporate bond markets are being saturated with debt issuances so heavily, Wall Street has started looking to all sorts of alternative vehicles to spread out the risk and just gather enough capital.

Numbers that size can lose all meaning but one metric is important to keep notice on: Free Cashflow for hyperscalers.

It’s already at or near zero forcing mature technology companies like Google and Meta to pay attention to their cash burndown needs like they’re a start-up again.

Debt Loaded and Fingers Crossed

To make the math work, Hyperscalers NEED that forecasted AI compute demand to materialize into fresh cashflows starting 2028 and into 2029 or default risk will start creeping into the market.

Between 1996 and 2001, telecom companies issued more than $500 billion in new corporate bonds, ultimately defaulting on half when markets realized the overcapacity fiber buildout could not be repaid.

Now Silicon Valley is creating a similar type of powder keg again.

Today’s hyperscalers are at least 2x more indebted and equally reliant on demand forecasts materializing into real productive sales to keep afloat and continue debt payments.

For more thoughts on this idea check out some of the archived posts.

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My 2 year old is in the “take shiny things and runaway with them” phase of life. The boy recently regretted taking a small button badge pin I keep near my desk when he pricked his finger with it running away. It hurt. He cried. I came over, dusted him off, took the pin away then placed it higher up so it would not happen again. He got over it and life moved on.

Not eventful enough to warrant Father of the Year but the symbolism peeked through none the less. The little button badge is tiny. Barely larger than a quarter. No one notices it 99% of the time. It reads “I’m the Boss” in bold letters.

It’s a reminder there’s no need to demand and shout for respect or be center of attention. It’s fine to let people do their thing to explore or make small mistakes. If others are leading the way, let them. You’re still in control of the situation. In the background. Watching. Supporting. Teaching. Ready to swoop in if things go awry.

He held the badge that said ‘I’m the Boss,’ but the pin-prick reminded him he’s still got a lot to learn. I didn’t need to shout to assert my authority; the natural consequences of the world did it for me. I just have to be there to help pick up the pieces once in a while.

In that way, I’m learning, while the boy may be the hero of his own story, he still needs that boss in the background to provide the help he needs by….

…Being a Fly on the wall.

Just being aware and mentally present of what’s going on for the kids in their brains goes miles to choosing how to handle their behaviors.

…Being A Comedian.

A source of levity at their humor level is critical for kids to have available Dad jokes, bad jokes or rad jokes all work. Being the butt of the joke is great but having a joke about a Butt is better. And just farting in front of them is best.

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…Being A Cheerleader.

A voice of confidence and show of support from good old Dad up in the stands before a player takes the game winning shot is a sports trope for a reason. It works. Should settle the nerves, not jolt them.

…Being A Squire

Humbly putting on/taking off his muddy shoes. The thankless grunt work of changing diapers and putting on sunscreen. Preparing a sippy cup at just the right water-to-applejuice ratio while they watch TV. and on and on.

Fun Fact: A “Bat Man” was a WW1 soldier assigned to an officer as a personal servant—handling their uniform, equipment, and errands.

…Being a “Nutritionist”

You don’t need to be Julia Childs and may barely match the skills of George Foreman. But get it done. Convincing a kid to put food in his belly is a small win you should always strive towards.

For more thoughts on this idea check out some of the archived posts.

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Everybody Loves Charts!

• Longer term trends in the markets and economy.

• Extra details on what seems underappreciated or overhyped.

• Link to some great explainers on the concepts.

**Everything as of 4/23/2026

According to equity markets everything is awesome! Q1 earnings are largely in line and forecasts seem undeterred by geopolitics. U.S indices are touching new highs. The VIX has fallen back to normal ranges and even global indices around the world are performing strongly.

Yet at the same time, ~15% of the global oil supply is missing with no clear indication when it will return. Tech is announcing another year with massive layoffs to help fund AI datacenters while grassroots and regulatory groups are working hard to halt the construction of those same AI datacenters.

How can all this be happening at the same time? The way I see it, it’s a Tortoise and the Hare style race to see what market driver wins dominance and impact on the markets for 2026.

Silicon Hares

After a quarter of dizzying AI product and innovation headlines, semiconductors (SOX Index) are being tagged back into the drivers’ seat after a year or so on the sidelines.

With analyst focus back on earnings growth expectations after digesting new product releases like OpenClaw, it has become obvious compute demand will continue. Cash is now racing into the semiconductor sector hoping to catch the next boom stage before its too late.

This is waking up NVDA with its massive market cap weight to throw around. INTC also soared on updated demand forecasts plus a massive revenue beat. Finally, not wanting to be left behind, TSMC and other semiconductor manufacturers all joined in on the move racing ahead of the S&P500 in a bullish sprint.

So we’re back to AI and silicon chips leading the way to new stock market highs? Some think so, but this time they may have some slow but steady competition.

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Carbon Tortoises

It’s all about energy and the re-opening of the Strait of Hormuz.

Oil is a rough market. I’ve read the industry’s rule of thumb for price elasticity goes like this: For every 10% decline in supply, price rises by 75%.

Goldman released its latest forecast on Brent oil price structure through 2028. They suggest, despite an open-ended 15% output loss, prices will peak near term even in its worst case scenario then smoothly return toward pre-war pricing.

Goldman assume Gulf production is likely to mostly recover within a few months of re-opening the Strait of Hormuz if there’s:

• no renewed strikes on oil assets

• a full and safe re-opening of the Strait.

Well, no shit Sherlock but how likely is that assumption exactly given world players? Because for every day that passes without a resolution to the blockades, the convexity of higher energy and refined product prices increase. Higher prices will slowly but surely eat into profit margins, growth and accelerate demand destruction. This doesn’t even factor in stability. What are the chances this happens all over again 6 months from now? in a year? in 3 years?

To their credit Goldman concludes with a warning:

“The economic risks are larger than our crude base case alone suggests because of the net upside risks to oil prices, unusually high refined product prices, products shortages risks, and the unprecedented scale of the shock.“

Which is analyst speak for “Fuck if we know!”

What Will Win?

Right now it appears the Silicon Hare representing semi-conductors and AI are in the lead and calling the shots. However, we all know how the fable ended. The slow but persistent grind of higher energy prices for longer may eventually catch up with the market and force a panic re-calibration everyone needs to consider.

Interested in being on the Trader Dads Podcast in 2026? Shoot me an email! I’d love to have subscribers on to sit for a discussion

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Thoughts? Questions? Comments?

Reach out! Maybe I’ll do a full post on the topic or as a Q&A

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The Berlin Wall fell on November 9th 1989 kicking off a wave of pent up reforms and political upheaval among the Eastern Block countries culminating with the fall of the Soviet Union in 1991. It marked a turning point in world history. The United States began its reign as a sole superpower. Globalized trade policies took hold across the world and nuclear disarmament commenced easing war readiness worldwide.

Not that I would remember any of it. I was likely too busy watching Teenage Mutant Ninja Turtles and playing with Legos as an oblivious 4 year old.

Unbeknownst to me, the biggest geopolitical changes of a generation were occurring and to reshape the expectations of the future every Millennial kid would eventually live through and inherit.

Cut to 2026 and the world is again accelerating in a new direction for a new generation and once again most kids have no idea what’s happening, what they’re in for or how wildly different the world will be once they reach adulthood.

April 1, 2026

In a single day, my kids experienced the return to lunar space travel, an admission the world’s long standing security alliance will soon end and the news an AI model capable of hacking into any application leaked into public domain.

All the while my kids were watching Leo on Netflix while shoving stuffed animals down their shirts as padding for an impromptu Sumo wrestling in the play room. Why are these events so important for their future?

Artemis II

Artemis 2 launched on live TV as the first crewed mission beyond low Earth orbit since 1972. This mission establishes what NASA hopes will be the foundation for a permanent lunar presence and stepping stone to further space expansion.

For the next generation, these lunar innovations will reshape daily life through advances in resource management and a burgeoning space economy expected to exceed $600 billion. Just as majoring in Computer Science in 1977 felt like Sci-Fi, tomorrow’s training will offer new diverse career paths ranging from lunar geology and robotics, to space-focused architecture and medicine to other specialized roles in lunar mining, space tourism, and planetary food science.

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The Strait of Hormuz

President Trump delivered a historic address to the nation attempting to explain the rationale for war that created the first true modern blockade in the Strait of Hormuz. Regardless of given rationale, as the world’s most critical energy artery, the Strait of Hormuz blockade acts as a geopolitical “widow maker” and further represents a Pandora’s box that cannot be closed.

For the next generation, the precedence has been set. The blockade is proven possible at paralyzing roughly 20% of global petroleum & driving fuel prices to record highs. Furthermore, President Trump explicitly abdicated U.S. responsibility to keep the strait open for NATO and its allies if our own interests were not impacted.

In other words, it’s going to be every country for itself soon enough via a new permanent risk the strait or other chokepoints around the globe could close again for any reason by anyone with a just few drones and missiles.

This will inevitably create a lifestyle defined by permanent inflation, food supply vulnerabilities and significantly higher costs for travel and consumer goods.

AI Break Out

Intended for an April 2026 release, Claude Mythos pitched itself as a groundbreaking frontier model capable of autonomously discovering and exploiting complex software vulnerabilities. Effectively a turnkey hacker swiss army knife for anyone to deploy against any system, it was posted online in full by mistake for anyone to copy and deploy. Oops!

The next generation is currently named Gen Alpha but I’ll wager they’ll be called Gen AI soon enough. Their lifestyle, security and economic wellbeing will be defined by AI tools ingrained in every part of their day. Everyone will have access to a digital super intelligent agent granting them power we can’t even understand fully yet.

So that was all in one day. Fortunately, my kids cannot understand the wild swings happening right now that will define their future. Best they just enjoy their innocence while they still can.

Interested in being on the Trader Dads Podcast in 2026? Shoot me an email! I’d love to have subscribers on to sit for a discussion

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Something different this month. I’ve spent the past few weeks catching up on AI tool usage and new ways to produce content. It’s pretty awesome what you can now do without draining hours to build and curate strong quality content.

I’ve revamped the YouTube channel starting this month to publish Explainer videos on common concepts and current events for the 3 main pillars of TraderDads: MARKETS, EDUCATION, DADLIFE. All the information and details have been curated by me with a backlog of ideas and interesting observations on the way.

• You’ll continue to get just 5 emails per month. No changes on this feed.

• The Explainer videos will only be on YouTube

• Many of the longer form articles will now get a companion video to give more detail and background on the topic.

Click the button below to jump to the channel and Subscribe!

YOUTUBE CHANNEL

Be back next month with a new podcast episode but in the meantime check out some of the new content for yourself —-

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Bank earnings for Q1 start publishing this week. Goldman Sachs reported yesterday, revealing its highest quarterly profit in five years. JPMorgan and Citigroup report today, then Bank of America and Morgan Stanley on Wednesday. The smaller regional banks will follow behind into next week.

Now, I recently opened my own bank to cater to a unique subset of customers and since launching I’ve learned that attracting customers to do business is hard.

I’ve barely been able to build a deposit base to work with so how do these banks make so much money?

Diving into Goldman’s numbers, it was equity trading revenue and NOT net interest income (the spread between deposit and loan interest) which did most of the lifting. In fact, their equity trading revenue was the highest three-month haul by any bank in history!

Truth of the matter is that modern investment banks’ traditional services like deposits and loans are driven by thin margins on high volumes. Their true value is customer acquisition. It’s really just a commoditized “top of the funnel” loss-leader for higher-margin services like advisory and trading.

And since these deposit and lending lines of business cannot compete on product features (hence commoditized), they must compete on price, accessibility, operational efficiency or marketing & trust.

Hard as it may be to thrive, this is the business I’ve chosen! So to rejuvenate the bank’s image to my Gen Alpha children, it was time for a strategic facelift for the Bank of Dad.

For anyone new, The Bank of Dad lets my kids deposit cash in my office and I pay interest to encourage savings and investment. I also offer loans at a higher rate.

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Marketing Lessons Learned

To improve the perception of the Bank of Dad, I considered some of the foundational principles of getting someone to trust you with their money.

Make Winning Super Fun

No one responds enthusiastically to a $ balance written on a whiteboard. In black and white. To encourage participation, the interest earned by giving me your cash must be tangible. Visible. Maybe make a <plunk> sound when it lands.

I get why banks offered free toasters for opening accounts.

As long as the Customer Acquisition Cost (CAC) is lower than the life time value (LTV) of the customer, you’ll make money over time — even if you give away things of lesser value. Think Cashback on a credit card. More generally, buy something in bulk to keep costs low but make it something that will still drive traffic to your location. Then give away the low quality item if they sign up.

Poor people are bad customers for banks.

With no allowance to speak of because of the increasingly cashless society we live in, I realized trying to get coin deposits from people with no money was a bad business strategy. I learned to focus reminders on when they had cash to spend.

Bank of Dad’s New Strategy

1. Make it a game and get a spokesman— Kevin Hart and Samuel L. Jackson never returned my calls. Next.

2. Offer a free gift — I used to go to the bank and they would give me a lollipop. We now do the same. Come by with a deposit over $0.05. Get a Dum Dum lollipop.

3. During self-induced turbulence at home, quickly nationalize the Bank and seize the peasants’ assets.

No one said this was a democracy. The Easter Bunny provided a small windfall of coins this year via a wild egg hunt. Exactly the kind of chaos windfall needed to make some healthy deposits to the Bank of Dad. So, in the name of “keeping it safe”, it is now safely vaulted in the Bank of Dad earning interest. Thank you for your Business.

Interested in being on the Trader Dads Podcast in 2026? Shoot me an email! I’d love to have subscribers on to sit for a discussion

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Thoughts? Questions? Comments?

Reach out! Maybe I’ll do a full post on the topic or as a Q&A

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