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Joined 1 year ago
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Cake day: June 10th, 2023

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  • InkytoScience Memes@mander.xyzascention
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    5 months ago

    Leaving academia was definitely one of the best choices I ever made for my (physical, mental and financial) health.

    I don’t regret doing my PhD, but I definitely spent two years too many on the postdoc treadmill.


  • InkytoPersonal Finance CanadaBank of Canada maintains 5% rate
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    5 months ago

    From a purely expected return perspective it only makes sense to pay back debts vs investing if the credit spread in the debt is larger than the investment’s risk premium.

    For secured debt (like a mortgage) held by someone with reasonable credit the equity risk premium is most likely larger than the credit spread.

    The analysis becomes more complicated when you take into account an uncertain income stream to use against the debt. Paying off your mortgage is like buying insurance against the tail event that you lose your house because you can’t make your mortgage payments.

    Insurance is generally a negative expected return activity. But the value is in reshaping the outcome distribution. Your average outcome is lower but you’ve flattened out the tail.


  • As a counterweight to the widening of wealth inequality, rising rates lower the value of essentially all risk assets. So the ones who truly benefit the most are the ones who only acquired their assets after the hiking cycle.

    This is partly why there are examples of periods with high inflation that also saw a narrowing of wage inequality. The post-war period in Europe was such an example. In that time the relative bargaining power of labour also helped because the high inflation was met with even higher pay raises. So working people were acquiring new wealth through their wages during a period of sustained low asset prices.

    For 2023 wage growth in Canada actually exceeded inflation. I would bet that we’ll see that trend continue this year as well as inflation comes down.