Episode 270: Victor Haghani and James White: The Missing Billionaires

<p dir="ltr">If the wealthiest families of the past century spent a reasonable amount of their wealth, invested in the stock market, and paid taxes, there would be thousands of billionaires today. But there aren’t. So, what happened? To answer this question, we are joined by authors and finance professionals, Victor Haghani and James White. Their recently released book, The Missing Billionaires: A Guide to Better Financial Decisions, uses the missing billionaires puzzle to explore how and why most investors fail to capture the returns offered by the market. Victor was a founding partner of Long-Term Capital Management (LTCM), the multi-billion-dollar hedge fund that famously collapsed in 1998 and nearly took the global financial markets down with it. His participation in the downfall of LTCM led him to reassess much of the way he thought about investing, and in this episode, he shares some simple but powerful frameworks and personal finance recommendations. We also receive accessible explanations of the Merton model and expected utility theory from James, take a deep dive into dynamic asset allocation, discuss optimal solutions for lifetime spending, and learn more about the certainty equivalent return and Sharpe ratios, plus so much more. Whether you’re an entrepreneur invested in your own business or simply focused on building long-term wealth, Victor and James’ book (and this conversation about it) will be a valuable resource for better financial decision-making, so be sure to tune in today!</p> <p><strong> </strong></p> <p dir="ltr">Key Points From This Episode:</p> <p><strong> </strong></p> <ul> <li dir="ltr" aria-level="1"> <p dir="ltr" role="presentation">(0:05:19) The puzzle of the missing billionaires (and why it matters to Victor and James). </p> </li> <li dir="ltr" aria-level="1"> <p dir="ltr" role="presentation">(0:09:45) Some common but critical financial decision-making problems most people face. </p> </li> <li dir="ltr" aria-level="1"> <p dir="ltr" role="presentation">(0:12:39) Unpacking the coin-f