A finance guide for millionaires and billionaires

Me on the floor of the New York Stock Exchange after doing an appearance on CNBC.The place is mostly a TV set these days.

This guide is primarily targeted to people who have 6 figure incomes and ay least 7 figures in assets.

If you’re a billionaire: thanks for reading! Hit me up at billionaire@agrawals.org. We can grab coffee. You can certainly afford to get more tailored guidance. But knowing the outlines might help you sanity check.

Everyone can benefit from the Banking and Spending sections.

This guide is focused on simplicity. You can obviously optimize further than the things I’ve described here. But many people recognize that saving time is more valuable than constantly optimizing for more money. Only one of those is replaceable.

Banking

First Republic is hands down the best bank I’ve ever worked with. My banker is fantastic. I’ve know her for 10 years and she always surprises me how much she is willing to do. And that’s when I had a whopping $5,000 on deposit with them. I had 100x that and Chase and didn’t feel like I got more service than if I had just a normal account. Same with Wells.

The only real requirement is you need to keep $3,500 in your checking account. They also charge northing for ATMs, provide refunds for ATM fees charged by the ATM owners and — something that is extremely rare — refund international ATM fees.

Their offices are generally in affluent areas (one is in the same building as a VC) and mostly coastal. If branch access is important to you, look elsewhere.

My personal banker is Ashley Churchill out of their Portland office. Yes, personal banker! Instead of dealing with a random pool of people, I have one person I can email with requests. It doesn’t matter if you’re actually based in Portland. I’ve lived in Portland, New York and San Francisco. Ashley has been with me the whole time.

Office: (503) 471-4903 | Email: amchurchill@firstrepublic.com

I’ve yet to hear “no.” Except when I asked about auto loans. They don’t have them. They will finance your jet though!

Spending

If you don’t pay off your credit cards each month, pay them off before anything else. Loyalty credits have extremely high APRs. Once you’ve paid them off, come back here.

  • Best credit card for people who just want cash back: Citi Double Cash. Essentially 2% back.
  • Best credit card for people who want cash back and a pretty good checking account to go with it: Alliant Credit Union. 2.5% without rotating categories. No annual fee.
  • Best credit card for people who want to get travel points for their spend: American Express Blue Business Plus. As of November 29, 2021. (I get a token number of points if you apply through that link.) No annual fee.
  • Best credit card for people who travel a lot and want luxury perks. American Express Platinum Card. If you apply through that link I get $100. You get 100,000 points.

There may be better offers out there for the AmEx cards, you can search for them. As I’m not – and don’t indent to be – a credit card blogger, I won’t be updating that information.

Investing

For investing, I split it into two: your marginable assets and other assets. (Assuming you have >$50,000 in marginable assets, otherwise this isn’t meaningful.)

Margin allows you to borrow against your stocks, but margin rates vary widely. At this writing,

Vanguard8.5%
Fidelity8.325%
Schwab7.82%
Interactive Brokers1.59%

In an otherwise competitive field, these differences are astonishing.

Why pay to borrow money you have? Your don’t pay taxes until you sell a stock. If you had $1M in stock and wanted to take $500k out, you could end up with a tax bill of $250,000. (Depending on state, holding period, etc.) But you can borrow against that money and use it for your every day expenses.

Ask Elizabeth Warren or Bernie Sanders how they feel about this.

Retirement assets

This used to be a lot more complicated given different trading commissions. Now that they’re basically all at $0, I’d just pick the one that looks easiest to you. This might be the same company that does your company’s 401k. (Fidelity and Vanguard do a lot of this.) Simpler to look at everything in one place.

A few other things that might make a difference:

  • Does the brokerage offer a large selection of cheap mutual funds? Fidelity and Vanguard both check this box.
  • What are the options commissions. Competition hasn’t affected this as much. I recommend that most people don’t invest in options. But if you do, you should do it in a retirement account regardless of what the conventional wisdom tells you.

Giving

You made a lot of money, even if a million isn’t what it once was. Give some of it away. VC and early Googler Hunter Walk has a guide to giving away money. His post has a lot more on this topic, including how to figure out how much to spend.

I prefer larger donations to fewer charities than small donations to a larger number of charities. If you donate $50, they will spend $40 in further mailing to get more money from you.

The most important thing when donating to charity is to not sell the stock before you give it to charity. You need to transfer it directly. Charities typically have a development person who can help with. If you have stock bought for $2,500, sell it for $10,000, you will have a taxable gain of $7,500. If you transfer the stock, you get to deduct the full amount.

Ask Elizabeth Warren or Bernie Sanders how they feel about this.

A better way to give money (and stocks) is through a donor-advised fund. You put your donation in to a special fund and get the tax break right away. You can decide actual charities and timing of donations later. This is especially useful for people who have highly variable income. Do the donations when your tax rate is 40% and don’t donate it when your tax rate is 20%.

Bribing government Campaign contributions

This one I’m torn on because representatives should represent the people, not corporate lobbyists and donors.

But some things are so high-impact it might be better to give $25,000 to a climate change PAC than a charity working on the same cause.

One that I’ve donated to is GrowSF, which is trying to make SF more livable. I also donated to Stacy Abrams’ Fair Fight. I like to think I played a small part in flipping the Senate. Donations to PACs and campaigns aren’t tax deductible.

Most importantly, tell people you’re giving! It may seem gauche, but peer pressure works. If we tell people we give, others might follow.

Thoughts? Where am I wrong? Leave comments and let’s get smarter together.

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Rakesh’s travel secrets for your holiday travel

Having flown more than two million butt-in-seat miles over the years, I’ve developed strategies for coping with the hassles of air travel.

Holiday air travel is a challenge all years. In the time of COVID, it’s even more challenging and you will be surrounded by even grumpier passengers.

  • Bring your COVID vaccination documentation. In theory, you won’t need this for domestic travel. But bring it anyway. Some places like NYC and SF require proof of vaccination for indoor activities. Although states and health providers issue digital cards, I recommend also bringing the paper CDC card with you.
  • Bring your mask. Yes, they are a pain in the butt. But they are required for travel, at least until January 18, 2022. Don’t be an asshole to passengers and airline staff.
  • Have alternative plans. Weather can be difficult and planes overbooked. Think about what your alternatives are if something falls through. This is going to be even tougher this year because flight schedules have less slack and there are going to be staffing shortages.

    If you’re traveling internationally:
  • Continually check requirements for your destination and connection points. Requirements are changing all of the time COVID cases get higher and lower. Although generally connection points where you don’t leave the airport are exempt from requirements, this isn’t 100%.
  • Pack COVID tests. You can generally find COVID tests at your destination, but why? You can buy a 6-pack or 2-pack. These take about 15 minutes and you need a Wifi connection. I’ve used them extensively. You can do it from the comfort of your hotel room and you can multitask for most of that time. Cheaper test kits, like the ones you can get at Walmart, are not valid for returning to the U.S.

    My general advice, updated for this year:
  • It’s not about you. Don’t take flight cancellations or being involuntarily bumped personally. No one is out to get you. Running an airline is an incredibly hard business even on a good day. Add in miserable weather and high loads and a lot of people are going to be unhappy. As much as their decisions might inconvenience you, there’s usually (though not always) logic behind the decisions. Decisions take into account numerous factors including number of passengers inconvenienced, crew availability, availability of alternate flights and aircraft positioning.
  • OK, it’s a little about you. Despite these priority rules, gate agents do have some discretion to change your priority. If you’ve got a solid reason, it can’t hurt to ask. Customers who were bumped from previous flights sometimes get this kind of treatment.
  • Life’s not fair. The airline business is a business. It’s usually not first come, first served. If there’s a standby list, the 100k mile traveler who walks up 5 minutes before they start clearing standbys she will get the seat over someone who flies once a year on cheap tickets and has been waiting 3 hours. Although the rules vary by airline, priority lists typically take into account things like frequent flier status, class of service, previous inconvenience, whether you are in a connecting city, fare paid and time of check in. Chances are that if you bought your ticket 6 months in advance, you’re more likely to get bumped.
  • Always call the airline when your flight is canceled. Usually the gate agent will tell you go to the customer service desk for help. Don’t do it. At least not before you call the airline. Get on your cell phone with reservations and ask them for help. Ideally, you’ll do this while you’re walking toward customer service or standing in line. It’s a good idea to have the phone number in your speed dial so you don’t have to fumble for it.
    Increasingly, airlines will automatically rebook you and send you an email, text or push notification with the new flight information. You do not have to accept what they book you on. If the revised flights don’t work, call, text, tweet with your requests. That sure beats waiting in a 90 minute line at the airport!
  • Look at the departure boards for other flights to your destination. If your flight is canceled, look to see which gate the next flight to your destination is going out from. If it’s in the next hour, high tail it to that gate and ask the agent to get on that flight. Again, be on your phone with reservations as you’re walking and standing in line. (A bluetooth headset is great for this.) If your flight is a few hours away, chances are no one is working that flight yet and you’re better off in the customer service line.
  • Look for an empty gate with an unoccupied agent. Gate agents can help you with other flights, but won’t do it if they’re busy running their own flight. Be polite, ask respectfully and you might save yourself a long wait in line.
    • Corollary: Look for an agent with gray hair. Many airlines have put GUIs on top of the more powerful reservations systems. Experienced agents often know the tricks to get the system to do things that less experienced agents can’t do.
  • If you’re a lounge member, go to the lounge for changes. Agents in airline lounges tend to know how to work the system better and are more willing to bend the rules.
    • If you’re not a lounge member, buy a day pass. It can be a great way to get aways from all of the noise on the concourse on a normal day, but even more so when the airport is going to hell. Of course, you also benefit from the nicer agents. During exceptionally difficult days, some airlines will stop selling day passes so that the lounges don’t get too crowded.
  • Be flexible. If you’re traveling to an area with multiple airports or airports within reasonable driving distance, consider taking flights there. If the change was the airline’s fault, they’ll usually pay to get you where you should’ve been. If it was weather or air-traffic control related, you’re on your own.
  • Be nice. People want to help people who are nice to them. The fastest way to get an agent to not help you is to start making demands, threaten to sue or start swearing. I witnessed one passenger in Las Vegas call an agent a “bitch” under his breath as he walked away. She called the gate he was going to and told that agent about it.
  • Call your friends. If you’re stuck and have a well-traveled friend, give them a call. I have a couple of people I can call when I get stuck to look up flight availability, hotels and other alternatives. Because they’re not dealing with dozens of other people, they can look at a wider range of options. They can give you a good picture of what your choices are. With options in hand, you become a gate agent’s friend by making their job easier. If you’re in my phone’s contact list, feel free to call me when you’re stuck.
  • If you have a really sticky problem, try FlyerTalk. FlyerTalk is the ultimate travel resource. It’s populated by ultra-frequent travelers. Many of them know more about airline reservations and ticketing than the typical reservations agent. Do a search to see if your problem is already covered. If it isn’t, pick the appropriate forum for your airline and post your question. Be sure you provide all the pertinent information, but don’t post things like confirmation numbers.
  • Sign up for your airline’s text messaging service. Many airlines offer text message alerts. In normal travel, this will send you flight status information including gate assignments.
  • Don’t put too much stock in the flight status boards. When there is extreme weather and a lot of cancellations, the flight status boards are usually fiction. The times shown are best guesses and can change frequently. It’s important to know that they can also become earlier. I’ve seen flights go from a scheduled 9:30 p.m. to 12:30 a.m. back to an on time departure. It actually left at 11:00 p.m., so the people who relied on the 12:30 a.m. time missed it. If you leave the gate area, use your cell phone or laptop and check on the flight every 15 minutes or so.
  • Keep your cell phone and laptop chargers in your carry on. If you suffer long delays, there’s a good chance you’ll run out of power. You might need these tools to help book your next flight. Because every gadget seemingly has its own style of connector, these are hard to come by in an airport. If you find that you are running out of power, look for a “power save” mode, which usually lets you eke out some more use by dimming the screen or throttling the processor.
  • Keep a pair of headphones in your laptop bag. With a laptop, headphones and Wifi, you can amuse yourself while you wait for your next flight. I spent one recent delay watching crappy television at fox.com. It won’t make your delay any shorter, but it will feel like it.
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Lobsterclass – free classes on product management

Lobsterclass

Lobsterclass is a free video class series on product management. It encompasses things I’ve learned in my team at Amazon, Microsoft, Aol and various startups. It’s a highly compressed version of what I teach my PM teams.

It’s suitable for anyone, from people who are just curious about product management to experienced professionals. This is not about project management; that’s usually a different discipline and requires a different kind of skillset.

There will be one class a week on video chat.

Feel free to drop in any time. No registration required, but if you want to be added to the calendar invite, DM me @rakeshlobster.

Tentative curriculum

  • Product 101 – May 27, 2020 @ 5 PM PT
  • Qualitative research
  • Quantitative research
  • Market segmentation
  • Pricing strategy
  • UX design
  • Dealing With Engineers Who Say What You’re Asking For Isn’t Possible
  • GTM
  • Working with biz dev
  • Marketing
  • PR
  • Venture capital

About the instructor

Rakesh Agrawal has been designing online products since the Web started. He has worked in a variety of product management roles at Amazon, Microsoft, Aol and several startups.

Rakesh built one of the first online newspapers, one of the first content management systems, the first visual voicemail system, voice content for cars (Alexa before Alexa in 2008) among others.

He has also written for TechCrunch, VentureBeat and washingtonpost.com. Rakesh has appeared frequently on CNBC and Bloomberg Television.

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Getting down to numbers: quantitative research

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“Aerial view of Tuvalu’s capital, Funafuti, 2011. Tuvalu is a remote country of low lying atolls, making it vulnerable to climate change. Photo: Lily-Anne Homasi / DFAT” by DFAT photo library is licensed under CC BY 2.0

Are you building the right product? It’s an important question whether you are a startup or a big company. Good research can help guide you. Doing it incorrectly and you’ll go down the wrong path.

There are two basic types of research: qualitative and quantitative. Qualitative generally involves asking people what they want or their experiences with existing products. Quantitative using hard numbers from your users.

Quantitative research can help you answer questions like “What features do I need to add to my product?” “What features can I remove from my product?” “How is my user base generating revenue?” “Where is there fraud and abuse?” (There is some overlap; I’ll do a separate post on qualitative research.)

Some caveats to look out for when doing quantitative analysis:

  • Data talk, but people hear it in different ways. Given the same set of facts, people can come to multiple interpretations.
  • Interpretation of some metrics can and should change over time. At the very least, acceleration will change over time.
  • A single metric can easily be gamed, either by accident or intent (conning investors).

These are some of my favorite things in quantitative analysis. This is by no means a complete list. 

A/B testing

This is commonly used to test different messages or designs. Two variants (A and B) are presented to different users. Marketing emails commonly use A/B testing. Take a small portion of your subscriber list and send one subject line to half and another subject line to another half. With the data on open rates that you get from these emails, you can send the one with the better conversion to the rest of your list. There can be more than two; you can have A/B/C.

1% testing

This is a variant of A/B testing. It’s commonly used to test different features, especially in complicated products or products so well established that you don’t want to change the experience overnight.

Take Facebook’s News Feed. This is a product that is used by billions of users around the world. Adding a new feature without testing can cause a lot of grief and negative feedback. Before you roll it out widely, you present the new feature to a tiny percent of the user and track how it performs. Do people use it? How often do people use it? Does it add or subtract from other features people use. (I call it 1% testing, but in Facebook’s case, it might be 0.001% testing.)

Market segmentation

One of the challenges with data is that averages can mask important differences. You can dig into data to identify segments that you want to go after. If you’re running a credit card business and find that 15% of your overall spend is travel, that tells you one thing. But when you look deeper, you find that a group of customers spend $50,000 a year on travel. This might lead you to create products for that lucrative customer.

You can also use data to figure out who your profitable and unprofitable customers are. In many products, you’ll find that some customers are unprofitable. They could be doing too many returns. (E-commerce.)

 Fraud/abuse analysis

Detecting fraud (illegal behavior) and abuse (legal behavior but not within your business model) is a great way to use data.

I worked for a company that sold long distance calls. When we looked at the usage data, we found that we had a very large amount of usage to Tuvalu. Given that it’s a tiny nation, this didn’t make sense. A closer look found that there was an error in our rate tables and we were selling something for 10 cents that cost us $2.00. As you’d expect, people from Tuvalu told each other about it and we became the calling service of choice for them. (Some of the details here have been changed.) 

Another use case is finding the outliers in all-you-can-eat plans. Think about cell phone data plans. In the AYCE model, some customers might use 1 GB of data and others use 100GB. Your business model and network capacity is based on average usage of 5 GB of data. The 100GB user hogs capacity and slows things down for everyone else. With data, you can develop new policies: the * that says data rates will be slowed down after 25 GB of use.

Search analysis

Looking at what people search for but you haven’t delivered is important to product planning and improving the experience. After all, they came to you for it.

Let’s say you run a ride app. When someone launches the app, they might be an area where you don’t offer service. Tracking those requests gives you insight on markets that you might want to look at when developing expansion plans.

It’s also a way to improve the product to suggest alternatives that the user might want. If someone is in New York City and searches for “In-N-Out,” you might respond “There are no In-N-Out burgers in New York City, but here are some McDonald’s.” Just kidding. I’d probably return Shake Shack, but In-N-Out is so much better.

Cohort analysis

The key to a successful business is that lifetime value is greater than customer acquisition cost. (Often written as LTV > CAC). You want to make sure that, on average, you make more from customers over their lifetime than it costs to get them.

Look at the customers that signed up for your service 1 year ago and how much they spent and when. For customers that sign up today, can you use the historical data to model what the new customers are likely to do?

When looking at data, you also have to weigh the cost of the analysis against the value of the data. If you’re using data to analyze how people navigate through your site, it may be sufficient just to track data on a small subset of users. Adding too much tracking can add to latency in your site or app.

Also, if you’re trying to decide whether or not to implement something that will take 2 days, it doesn’t make sense to spend 2 weeks to build a system to get the data.

There are a variety of tools you can use for quantitative analysis, depending on what you’re trying to get at. Marketing tools like HubSpot handle A/B testing for email campaigns. Google and Facebook have their own tools for ad performance analytics. Google Analytics and Adobe Analytics allow you to analyze user behavior. For complex feature-level data, you will likely have to create your own database and run SQL queries against it.

COIVD-19 caveat: For most businesses, I don’t recommend doing quantitative research based on data beginning in March 2020, unless you’re using it to compare the impact of COVID-19. If you try to project based on data from March 2020 on, you’re likely to over or underestimate behavior post COVID-19. 

Grammar trivia: Data is plural, not singular. (Plural of datum.) It’s one of those weird English things that doesn’t seem right, but is. Like how a person who runs a restaurant is a restaurateur, not a restauranteur.

 

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Pricing the COVID-19 vaccine

It’s 2020’s Holy Grail: the coronavirus vaccine. Large parts of the country and the world are shut down in a deadly pandemic. Scientists around the world are racing for a vaccine to end the suffering and re-start the economy.

Let’s say you found it. After 9 months of hard work, you have the answer to the world’s problems. What do you charge for it?

(Unlike most strategy and pricing questions I pose, there isn’t what I believe to be a “right” answer. This post is a framework for you to think about pricing in general. In all likelihood, you’re not developing a vaccine. But, if you do, I’ll help you think through pricing in exchange for a lifetime supply of your vaccine.)

Some factors to consider:

  • What is the value to the customer?
  • What is the cost of developing and producing the vaccine?
  • How quickly am I delivering it?
  • What’s the frequency of use?
  • What impact does the pricing have on my brand?
  • What are the regulatory impacts?
  • How does this affect other products I have?

Consumer value

No doubt the value is here. At a country level, we should be willing to pay $1 trillion — we’re spending more than that in the current bailout and recovery packages, with an unknown amount of misery to go. From an overall health of the country and the economy, the government should write a big check that covers all 350 million people.

It’s when it comes down to consumer pricing, it becomes a lot tougher, In this scenario, I’d be willing to write a check for $100,000 to solve this for me and my spouse. Some would pay more; most could only afford a fraction of that. In economic terms, this is largely a price inelastic good. But I don’t get any meaningful benefit unless the bulk of the population is immune. (You can’t go to restaurants, go to a bar or get a haircut.) The price needs to be set so that the average person can buy it.

This is different from a drug like Sovaldi, where a 1-month, $28,000 treatment can cure you of Hepatitis C. There aren’t dependencies on the behavior of the rest of the population.

Cost of development

Cost + margin is a common (and lazy) way to develop prices.

In the case of drugs, the first pill costs you $2 billion and the next one costs you 5 cents.

The cost of R&D is less material if you’re Pfizer than if you’re a biotech startup. Pfizer might want to do it at a loss for other reasons; a startup that may only have one big drug in its lifetime needs to price differently.

Delivery timeline

One of the challenges in pricing is that people assume that if something takes longer, it is worth more. Clearly it involved more effort. So it’s “fair” that you charge me more. That’s how most industries work and how employees generally work.

In this case, a solution today is much better for society (and the individual) than a solution 6 months from now.

I would pay a higher “delivery” fee for my meal if it showed up immediately in my apartment versus waiting 45 minutes for it. But that’s not how most people think about these things.

Frequency of use

If one use cures or prevents the disease, then the pricing should reflect the lifetime value because you have to get it all up front. See the Sovaldi example earlier.

On the other hand, if you need to use it weekly or monthly, you can charge less because you have a long term revenue stream.

Brand impact

Depending on your pricing strategy, you could have a positive or negative impact on the brand. Some people say that if Pfizer discovered a vaccine, they should give it for free immediately to everyone because they would be remembered forever as the savior of the world.

But does the brand matter? In the case of drug companies, it really doesn’t, for two reasons. First, very few people know what companies make what drugs. Without Googling, what drugs does AbbVie make? Even if you do Google it, the first page of results don’t tell you what it makes. (You have to click on a link.)

The second is that pharmaceutical companies have a monopoly on the branded drugs they make and someone else gates what you purchase. Your doctor is going to prescribe whatever drug the hot pharma sales rep who took him to lunch told him about  the drug that is the best for your condition.

There will be some initial PR blowback, but in the long term, it won’t matter. This is partly how doses of insulin cost hundreds of dollars – and the price keeps going up – despite the fact that the patent for insulin was once sold for $1. Eli Lilly, Novo Nordisk and Sanofi just don’t care what you think of their brands.

The brand impact matters more if you’re Target, Walmart or Pepsi.

Regulatory impact

For a coronavirus vaccine, this is probably the biggest constraint on pricing. Charge too much and the government may pay the bill to get the pandemic under control and then start probing every other aspect of your business.

In some cases, some governments will say, “Screw you and your patent. We’re going to make it ourselves.” This is especially true of developing countries. In a pandemic, this isn’t a hard decision to make.

Impact on other products

“This is an important life-saving drug and everyone should get it for free.”

Well, that may be true. But there are a lot of life-saving drugs. Do you give all of the life-saving drugs out for free and only make your profits on the quality-of-life drugs?

Have you undercut your entire business and the way people think about healthcare? (Leave aside the issue of whether pharmaceuticals should be a for-profit business.)

As I said at the beginning, this is not a guide to pricing your coronavirus vaccine. But these principles apply in pricing most things. As tech becomes a much deeper part of society, we’ll have to pay more attention to regulatory impact than we have so far.

For most products, competitive pricing will also matter.

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Favorite things, day 1: podcasts

Podcasts make me smarter. It’s that simple.

There is so much great information from so many smart people out there, on any topic you can think of.

My favorite podcasts are from experts who know what they’re talking about. Even better if they also interview smart guests.

Fortt Knox by Jon Fortt

Jon is one of the smartest voices on technology trends, the big tech companies as well as tech policy issues. He also interviews some of the biggest names in tech and business. I asked Jon what his favorite pods are. He said:

He is also a fellow refugee from the newspaper industry. Both of us made the right call there; both of us are sad about its state.

Slate Money with Felix Salmon

Felix talks about the global economy, finance and has been talking a lot about Brexit. (I’m guessing he’ll talk a lot about the disaster as it unfolds.) He also talks about technology companies. There are sometimes interesting segments on personal finance.

This is a very geeky podcasts, but I’m a geek, so that’s perfectly fine.

(I know I’m giving short shrift to his partners and guests, but I know Felix.)

Stay Tuned with Preet

Preet was the U.S. Attorney for the Southern District of New York. SDNY has the most powerful and influential prosecutors in the world. Preet was famously fired by Trump for not returning his phone call.

Much of the podcast is focused on current politics, with impeachment dominating recent episodes and I imagine the months to come. The back half of the podcast is interviews with a stellar lineup of guests. My favorites are:

  • Ken Feinberg, who ran the 9/11 victims fund. Also known as the Master of Disaster, Feinberg is often called on to administer settlements and charitable donations. It’s an interesting look at how to assign dollar values to human life and suffering.
  • Edward Norton. I usually skip past celebrity interviews, but Norton just drew me in. Not only is he a terrific actor, he struck me as having genius-level knowledge. It was fascinating (and sad) to hear some of his anecdotes about structural racism. e.g. In NYC, they opened a beautiful beach to the public. But they built the bridges so low that public buses (relied on by African Americans) couldn’t fit under them.

Preet’s book, Doing Justice, has fascinating insights into our justice system and is a must read/listen for those who care about justice, holding white collar criminals accountable and the travesties inflicted by our justice system.

Disclosure: Jon and Felix are personal friends. I’ve never met Preet, though I hope to some day. Preet ducked a question I asked in an interview. I worked at Amazon, but was nowhere senior enough to meet Wilke. Affiliate link for Preet’s book.

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Rakesh’s travel secrets for your holiday travels

Having flown more than two million miles, including more than 45,000 in the past month, Over the years, I’ve developed strategies for coping with the hassles of air travel.

I hope you don’t need any of them on your holiday travels, but just in case:

  • It’s not about you. Don’t take flight cancellations or being involuntarily bumped personally. No one is out to get you. Running an airline is an incredibly hard business even on a good day. Add in miserable weather and high loads and a lot of people are going to be unhappy. As much as their decisions might inconvenience you, there’s usually (though not always) logic behind the decisions. Decisions take into account numerous factors including number of passengers inconvenienced, crew availability, availability of alternate flights and aircraft positioning.
  • OK, it’s a little about you. Despite these priority rules, gate agents do have some discretion to change your priority. If you’ve got a solid reason, it can’t hurt to ask. Customers who were bumped from previous flights sometimes get this kind of treatment.
  • Life’s not fair. The airline business is a business. It’s usually not first come, first served. If there’s a standby list, the 100k mile traveler who walks up 5 minutes before they start clearing standbys will get the seat over someone who flies once a year on cheap tickets and has been waiting 3 hours. Although the rules vary by airline, priority lists typically take into account things like frequent flier status, class of service, previous inconvenience, whether you are in a connecting city, fare paid and time of check in.
  • Always call the airline when your flight is canceled. Usually the gate agent will tell you go to the customer service desk for help. Don’t do it. At least not before you call the airline. Get on your cell phone with reservations and ask them for help. Ideally, you’ll do this while you’re walking toward customer service or standing in line. It’s a good idea to have the phone number in your speed dial so you don’t have to fumble for it. With advances in technology, they might be able to rebook you over the phone and email you a new boarding pass that you can pull up on your cell phone. That sure beats waiting in a 90 minute line at the airport!
  • Look at the departure boards for other flights to your destination. If your flight is canceled, look to see which gate the next flight to your destination is going out from. If it’s in the next hour, high tail it to that gate and ask the agent to get on that flight. Again, be on your phone with reservations as you’re walking and standing in line. (A bluetooth headset is great for this.) If your flight is a few hours away, chances are no one is working that flight yet and you’re better off in the customer service line.
  • Look for an empty gate with an unoccupied agent. Gate agents can help you with other flights, but won’t do it if they’re busy running their own flight. Be polite, ask respectfully and you might save yourself a long wait in line.
    • Corollary: Look for an agent with gray hair. Many airlines have put GUIs on top of the more powerful reservations systems that underlie them. Experienced agents often know the tricks to get the system to do things that less experienced agents can’t do.
  • If you’re a lounge member, go to the lounge for changes. Agents in airline lounges tend to know how to work the system better and are more willing to bend the rules.
    • If you’re not a lounge member, buy a day pass. It can be a great way to get aways from all of the noise on the concourse on a normal day, but even more so when the airport is going to hell. Of course, you also benefit from the nicer agents. During exceptionally difficult days, some airlines will stop selling day passes so that the lounges don’t get too crowded.
  • Be flexible. If you’re traveling to an area with multiple airports or airports within reasonable driving distance, consider taking flights there. If the change was the airline’s fault, they’ll usually pay to get you where you should’ve been. If it was weather or air-traffic control related, you’re on your own.
  • Be nice. People want to help people who are nice to them. The fastest way to get an agent to not help you is to start making demands, threaten to sue or start swearing. I witnessed one passenger in Las Vegas call an agent a “bitch” under his breath as he walked away. She called the gate he was going to and told that agent about it.
  • Call your friends. If you’re stuck and have a well-traveled friend, give them a call. I have a couple of people I can call when I get stuck to look up flight availability, hotels and other alternatives. Because they’re not dealing with dozens of other people, they can look at a wider range of options. They can give you a good picture of what your choices are. With options in hand, you become a gate agent’s friend by making their job easier. If you’re in my phone’s contact list, feel free to call me when you’re stuck.
  • If you have a really sticky problem, try FlyerTalk. FlyerTalk is the ultimate travel resource. It’s populated by ultra-frequent travelers. Many of them know more about airline reservations and ticketing than the typical reservations agent. Do a search to see if your problem is already covered. If it isn’t, pick the appropriate forum for your airline and post your question. Be sure you provide all the pertinent information, but don’t post things like confirmation numbers.
  • Sign up for your airline’s text messaging service. Many airlines offer text message alerts. In normal travel, this will send you flight status information including gate assignments. As airlines automate their service recovery, they’re using text messages to communicate flight information. When United cancels a flight they can often rebook you automatically. Your new flight information gets sent to your cell phone.
  • Don’t put too much stock in the flight status boards. When there is extreme weather and a lot of cancellations, the flight status boards are usually fiction. The times shown are best guesses and can change frequently. It’s important to know that they can also become earlier. I’ve seen flights go from a scheduled 9:30 p.m. to 12:30 a.m. back to an on time departure. It actually left at 11:00 p.m., so the people who relied on the 12:30 a.m. time missed it. If you leave the gate area, use your cell phone or laptop and check on the flight every 15 minutes or so.
  • Keep your cell phone and laptop chargers in your carry on. If you suffer long delays, there’s a good chance you’ll run out of power. You might need these tools to help book your next flight. Because every gadget seemingly has its own style of connector, these are hard to come by in an airport. If you find that you are running out of power, look for a “power save” mode, which usually lets you eke out some more use by dimming the screen or throttling the processor.
  • Keep a pair of headphones in your laptop bag. With a laptop, headphones and Wifi, you can amuse yourself while you wait for your next flight. I spent one recent delay watching crappy television at fox.com. It won’t make your delay any shorter, but it will feel like it.
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Favorite things, day 2: credit cards

Amex-Green-Cards

There are many reasons I love credit cards. As a payments nerd, I marvel that I can be on the far side of the world, tap a card and walk away with things I want. As a marketing nerd, I love figuring out how credit card companies structure offers and guessing at CAC.

As a frequent traveler and a consumer, credit cards offer great benefits and conveniences. Rewards cards get me premium travel and beautiful hotels all over the world. They get me into lounges.

IMPORTANT: If you do not pay off your credit card every month, do not get a rewards card to charge on to. You will pay way more in interest every month than the benefits are worth. The reason American Express, Chase and Citi are willing to pay billions to the airlines is that many humans are economically irrational and way overpay for frequent flier miles that they then have to beg to use.

If that doesn’t describe you, or you have the discipline to separate credit card spend, then you can get a lot out of value from premium cards.

American Express green card

A surprise this year: AmEx’s re-introduction of the Green card, the one that started it all. This used to be a status symbol. Getting an AmEx Green card was a sign that you’ve arrived.

AmEx is bringing this card back with a vengeance. The new AmEx Green Card is a no-brainer for frequent travelers. Just go apply now. (referral link)

For a very reasonable $150 annual fee, there is a lot you get up front:

  • 35,000 Membership Rewards points. I value those at $612.50.
  • $100 per year toward Clear membership. This is the only card I know of that offers credit for Clear.
  • $150 in statement credits toward Away luggage. I’m not a fan of their luggage because I don’t like spinner wheels, but plenty of people do. I’ll probably get some accessories. If you use someone’s referral link, you get another $20. $170 towards some good – but not road warrior grade – luggage.

That’s more than $850 in value for $150, with a small $2,000 minimum spend.

The bonus categories are perfect for travelers: travel and restaurants. This is the vast majority of my spend.

You also get access to Lounge Buddy lounges. These are not the high end Centurion American Express lounges.

You also get most of AmEx’s travel benefits, which are well above average compared with the industry.

This is a card that you should just get.

 

 

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Favorite things, day 3: Hawaii

(All photos taken by me; message me for licensing.)

Sun, sand, beach, surf, ancient cultures, outdoors — there’s so much to love about Hawaii. An archipelago of 8 primary islands, it offers a great break far away from most things. For Americans, no passport required.

Hawaii is not a monolithic place. I recommend different parts of Hawaii depending on what you’re interested in. In order of my favorites.

Kauai

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Hiking for all skill levels, gorgeous waterfalls. Kauai has one of the most famous hikes in the world – the Kalalau Trail. It’s sandwiched between the cliffs of the Na Pali Coast and the Pacific Ocean. It is always crowded, often muddy. Still, you have to do it. For the more adventurous, there is a spur trail that will take you to a narrow ribbon of water falling off the cliffs. The spur trail is four miles round trip, strenuous and poorly marked.

I prefer the Pihea-Alakai Swamp trail in Kokee State Park.

Hotel recommendation: Princeville Resort (formerly St. Regis Princeville).

Maui

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Beaches, beaches, beaches – by far the best beaches in the island. The road to Hana provides a windy path through lush forests and waterfalls.

Hotel recommendations: Fairmont Kea Lani, Andaz Maui.

Hotel recommendation if you’re trying to convince your significant other not to have kids: Grand Wailea, A Waldorf Astoria Resort.

Big Island

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The Big Island is more low-key than its neighbor islands. The big highlight here is Hawaii Volcanoes National Park.

The Kilauea Iki Crater hike has you hike from the rim of the crater down into the crater floor and up the other side. One of the best hikes I’ve done.

It is a long way to the volcano from Kailua-Kona area, where most people stay. You should plan to spend one night near the volcano. Unfortunately, like near most national parks, the quality of the lodging leaves a lot to be desired.

Hotel recommendation: Fairmont Orchid.

Hotel non-recommendation: Hilton Waikoloa.

Lanai

View from room Angelfish 3, Manele Bay Hotel

It’s not Maldives isolated, but it’s pretty isolated. There are basically two things to do on this island: golf and go to the beach.

This is where Bill Gates got married. He rented out every hotel room on the island and chartered all of the helicopters on nearby islands.

Ironically, Larry Ellison now owns more than 95% of the island.

I also saw Al and Tipper having breakfast here once.

There are two hotels, one on the beach and the other inland known for its golf courses. I don’t golf and I like the beach so I haven’t stayed there.

Hotel recommendation: Four Seasons Resort Lanai (formerly Manele Bay Hotel).

Oahu

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This is where most people go, partly because it’s the easiest to get to by air from most of the world. (From the West Coast, all of the above except Lanai, are accessibly nonstop.)

If you don’t vacation a lot, just need to get the hell out of a Midwestern ice scape and have kids in tow, this is probably a good place. You have city, sights (Pearl Harbor, most notably), beach, surf… a little bit of everything.

Waikiki Beach is one of the best known beaches in the world. It’s way too crowded for me. I try to avoid walking around Waikiki. Lots of kids and many, many planeloads and busloads of tourists from Japan.

I prefer to go the North Shore or Kailua areas. The Bellows Air Force Base beach is one of the most stunning beaches I’ve been to. Much of Lost was filmed on the North Shore.

Hotel recommendations: Royal Hawaiian, Westin Moana Surfrider. (I prefer the Royal Hawaiian, but it usually comes down to price.)

Hotel non-recommendation: Hilton Hawaiian Village.

I haven’t been to:

Molokai – I’ll get there some day.
Kahoolawe – It’s uninhabited and off limits.
Niihau – The Forbidden Island. It’s privately owned and you need an invite.

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Favorite things, day 4: TiVo

For the days leading up to Christmas, I’m counting down a few of my favorite things. These are not in priority order. The closest thing there is to an order is least surprising to most surprising.

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TiVo has a special on their OTA Bolt until 12/29/19. Including lifetime service, it costs $350. There’s also a bonus package deal for a STB for another room. I recommend taking that. (Not an affiliate link.)

Twenty years into the existence of the DVR, there is still no substitute for the company that (almost) started it all: TiVo.

The company, whose name is synonymous with the digital video recorder, continues to create the best of them — even if vast majority of people don’t use theirs.

TiVo has the most polished interface of the combo DVR/streaming devices.

It also has four features that put it well ahead of everyone else:

  • Universal search. I can do one search for content across the vast majority of the recorded and streaming universe.
  • Extensive metadata. The search is powered by metadata that you can browse to your heart’s delight.
  • Automatic commercial skip. For heavily watched programming, like primetime network shows, you don’t even have to press a button. When the TiVo detects it’s at a commercial break, it skips past it.

The most important, for me, is offline download. I can store recorded shows on my iPad for watching on planes or in hotel rooms.

I can also stream shows from my home wherever I am in the world. There are no error messages that I’m outside of the license area for the content; no messages that my show has disappeared because it is no longer in the viewing window.

I can also watch recorded shows in other rooms with a dedicated device or a TiVo app. From the TiVo app, I can send it via AirPlay.

When I talk to PMs (both senior and aspiring), TiVo is always my cautionary story of how you can have the best product and still lose.

Distribution is incredibly important, as the cable companies have shown. The first 10 revs of cable company DVRs were horrible, horrible products. Comcast has finally come close to catching up with X1.

Deadweight loss quotient: Up to $600. But the OTA version will save you a ton of money over cable. Pair it with an HDTV antenna ($20-$50) and you’ll come out ahead in less than a year.

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