Q3 Client Letter

Tyler Linsten Client Letters, Investing

It’s been kinda nasty out there – what to do about all of the spookiness? 

[gview file=”https://aldercovecapital.com/wp-content/uploads/2018/10/Q3-2018-Client-Letter.pdf”]

Spending Hack: Stop Wasting So Much Damn Food

Tyler Linsten Not Sarcasm, Personal Finance

Click for the personal finance angle, stay for the recipe at the end.


Food waste is a huge problem. This piece in the Seattle Times estimates the number to be $1500 per household in the US. I waste more than I’d like, and I bet you do, too. Just like other financial hacks – like opening a high-yield savings account or diverting spending through a cash-back credit card – minimizing a painful line item like food waste can have a big effect on your annual finances.

As we know, lower spending equals more savings.

And more savings equals more dollars flowing into the Magic Compounding Machine, also known as your long-term investing portfolio.

And more money in the Magic Compounding Machine means you’re closer to doing whatever it is you want to be doing with your money.

If we think of it in terms just like the other financial hacks I mentioned, it’s pretty compelling:

  • Use high yield savings account (yielding 1.90% today, versus 0.05%) on $25K in emergency savings account: Gain $462.50 per year
  • Use 2% cash-back credit card for $30K in annual spending (and never carrying a balance), versus using a debit card: Gain $600 per year
  • Cut food waste in half by being more conscientious and getting creative with cooking: Gain ~$750 per year

So there’s $1812.50 we just found. That’s not nothing. It’s very much something for most people and for someone earning $60,000 per year this is the equivalent of a perpetual 3% raise in pay.

Oh yeah, here’s the recipe from the Times article. Sounds pretty tasty:

Serves 3 or 4

Use any melting-friendly cheeses you’ve got — the more the merrier; cheddar, jack, mozzarella and Gruyère all work great in strata. For your extras, more is more, too; the last one I made had green onion, prosciutto and lots of rosemary, and it came out fantastic (and I don’t even especially love rosemary). And you can sub half-and-half for the milk and cream. If you have leftovers, they reheat perfectly: Just pour a little half-and-half, cream, milk or stock over them to revive, then bake covered for 20 minutes at 375 degrees, or microwave.

About 6 to 8 slices of bread (about 6 cups cubed)

5 eggs

1¼ cups whole milk

1¼ cups whipping cream

1 teaspoon salt

Several dashes of hot sauce

2 (or more!) cups grated cheese

A couple handfuls of extras, e.g., chopped onion (green or otherwise); mushrooms or zucchini; pieces of ham or prosciutto; bits of cooked bacon or sausage; any kind of fresh herb(s), chopped

1. Preheat oven to 350 degrees.

2. Butter a 2-quart or 2-liter casserole dish.

3. Cut or tear bread into about 1-inch cubes (a serrated knife works nicely).

4. In a medium bowl, mix the eggs, cream, milk, salt and hot sauce (a hand blender is quicker than a whisk).

5. Make a layer of about a third of the bread cubes in the bottom of the casserole dish, and sprinkle with about a third of the cheese and half of your extras; repeat for another layer, then top with the remaining bread cubes and cheese.

6. Pour the egg mixture into the casserole. (If you want to make it ahead, it can be refrigerated now all day or overnight before cooking.)

7. Bake at 350 degrees for 40 minutes; let rest about 10 minutes before serving.

You Should Probably Do This: Credit Freeze Edition

Tyler Linsten Not Sarcasm, Personal Finance

It’s not often there are financial things basically everyone should do, regardless of their situation. This – a free credit freeze – is one of those things. 

Good news! The government has done something to help you, and that would be requiring the three major credit reporting agencies to offer a credit freeze to consumers – FOR FREE.


Don’t take my word for it, listen to (or read) the details via NPR here.

Unless you expect to be applying for credit tomorrow, it makes sense for anyone with something to lose (this means you and me) to lock down their credit. I’ve done the hard work for you below:

Freeze via Equifax

Freeze via Experian

Freeze via Transunion

Don’t forget to freeze with all three. Yes, it’s super annoying to have to do this three times, but how often do we lowly consumers get a good deal thrown our way from the powers that be? Not often. So for the sake of your financial security, take the 15 minutes and freeze your credit. Thieves will hate you but Future You will look back at you with pride.

Personal Finance 101 in a Single Picture

Tyler Linsten Investing, Personal Finance

Study up. You’re living the test.

You can head straight to PF 201 if you master the course above.

Spending the $1,000 results in an instant 100% loss in value, storing it in cash brings a 53% loss in value over 25 years, saving it brings a 22% loss in value over 25 years, but investing results in a 238% gain in value over 25 years.

There are so many important bullet points to be extracted from the table above. These are lessons some people never learn and are more valuable the earlier you start:

  • Spending money is not a great investing strategy, but prevents losses to inflation (this is sarcasm).
  • Inflation is an absolute killer. It is the slow-churning, deadly assassin in your financial life.
  • Even a 2% rate on cash in the bank leaves you with a 77% less purchasing power after 25 years when compared to investing @ 8% per year AND you still lose to inflation.
  • Beating inflation (earning 8% versus 3% inflation) is the only way to increase your wealth.

Let’s repeat that last one, as it’s the answer to the only question on the PF 101 test:

  • Beating inflation is the only way to increase your wealth.
  • Beating inflation is the only way to increase your wealth.
  • Beating inflation is the only way to increase your wealth.

And for the visual learners:

Stop Throwing Away Free Money, Emergency Savings Edition

Tyler Linsten Investing, Not Sarcasm, Personal Finance

Yeah, you. Knock it off. 

If you have any kind of sizable amount of cash saved outside of your retirement accounts, and many people do, then you’re probably passing up a nice chunk of change by letting it sit idle, earning little-to-nothing in interest. It’s understandable. You just accumulated it in a checking or savings account at your favorite bank, and it’s annoying to open new accounts. Inflation has been pretty low so you’re not too worried about earning nothing. And pretty much everything is better than opening a bank account.

But now you can be paid handsomely all year for a few minutes of your time today.

A Normalization

This is a serious move in the interest rate on US Treasury Bills, and yields on savings accounts have followed.

Seemingly overnight, we’re back to a more “normal” interest rate environment. The Fed is raising rates and banks are more comfortable hiking their own rates on deposits. This is something you need to take advantage of. Here’s why:

Let’s say you have $50,000 in annual expenses.  A very reasonable amount of cash to have in reserve for an emergency account could be deemed six months’ worth of expenses, or $25,000. Plop that amount in an account yielding just 1.85% APY (annual percentage yield) and, voila, you’re now making $462.50 per year for barely lifting a finger. Even if it takes you half an hour to set up the new savings account and link your old checking/savings account, it’s basically the equivalent of earning over $900/hr for your time.

It’s super easy. Do an online search for banks with FDIC insurance and then you can sort according to yield. If you have no allegiance to specific brands or features then you’re free to decide based on yield. Here’s a search I was able to pull up via Nerd Wallet:

Potential homes for your emergency savings.

That’s it. We’re no longer in an interest rate environment where it doesn’t matter where your cash sits. Take advantage of the sea change and pay yourself.  Future You will like this.