“Some people are so poor, all they have is money.”
—Damon Dominique
Back in May, one of my favorite YouTubers Damon Dominique released a video titled, “A Finance Masterclass for Smart People Who Aren’t Interested in Money & Finance.” Instead of indulging in it immediately, I put it on my “Watch Later” playlist and let it sit there for five months with the intention of watching it, taking notes and sharing my thoughts with you all. At long last, I finally watched the video!
Damon is an American living in Paris, France, and is self-employed with a few different streams of income. He set up his own business so that he could write things off on his taxes as business expenses—like his laptop and his fancy pen. In this hour-long video, Damon discusses his “beef with finance,” working with accountants, the pros and cons of being self-employed, inflation, taxes, how rich people use money, brokerage accounts, capital gains, investment simulations, stocks and exchange-traded funds (ETFs), retirement accounts, lump-sum investing versus dollar-cost averaging, real estate, cryptocurrency, being an American living abroad, financial mindset and the philosophy of money.
Damon sees finance as a “topic that’s rather gatekeepery” and berates the U.S. public school system for not teaching us about taxes. I agree—why don’t we learn about taxes in school when that public education is funded by taxes? One thing I hadn’t realized is that when I eventually take money out of an investment, it gets taxed at a lower rate than income does.
Despite his sentiments around finance, Damon learned about it because it stressed him out and he wanted the “peace of mind” that comes when you understand money. He says, “Once you know how money works, you don’t have to worry about it anymore, because you can always make more.”
When discussing investing, he notes that even after learning about it he still sees it as gambling. However, he sees pretty much anything to do with money as a risk: “Which risk are you more comfortable with: Risking your money in a bank account, losing value to inflation” or losing it in the stock market? Either way, there’s a risk. It’s all about which risk you want to take.
My favorite segment was when Damon differentiated between stocks and ETFs with two different examples. The first is that he thinks vegan and plant-based food will “take off in the next 15 years.” But he doesn’t necessarily think one company will do better than the other (e.g., Beyond Meat will soar while Impossible Foods will tank); he thinks “the whole idea is gonna take off.” In comes the ETF, full of stocks and properly diversified to avoid one stock ruining his returns. The second example is an ETF as a box of vitamins. Damon says, “Maybe this one will make me throw up, but this one will make me feel really good!” As someone who has recently had multiple incidents with multivitamins making me vomit, this gave me a much-needed laugh! (I’m OK, but I will be leaving a bad review 😂)
Damon also offered a positive aspect of cryptocurrency that I hadn’t thought of—international payments. Since he lives in France but pays people from all over the world, he has run into issues with fees and taxes. Cryptocurrency as a potentially global currency would enable people to be “global citizens” and live and work from anywhere in the world without being tied to a specific place of residency.
While setting up his individual retirement account (IRA), Damon felt existential anxiety about how finance requires that we make these lifelong decisions about our money when we might not be ready or know what our lives will actually look like. Any plan is just a wild guess that we—and the planet—will be around and able to retire when the time comes. Though this is something that could give me more anxiety about money, the flip side is that since we have no control over what’s going to happen, it’s not worth staying up at night thinking about it!
One of Damon’s final points is to “prioritize the big wins” like using your great credit score to get a better loan from the bank when you want to buy a house instead of thinking about how much money you would save over time by not buying that $5 latte today. This is where so much press around millennials and avocado toast could be immediately squashed. Wealth ultimately isn’t about all of the things we didn’t buy so that we could save more, it’s about that balance between our lived experiences and the risks we take to live them.
