This week’s letter comes to us from Little Johnny little Johnny writes Dear George chi, it’s not fair that everybody else gets their letter read, and I never do. Little Johnny goes on to say more. But I’ve heard enough, heard enough little Johnny, I get enough talk about fair not fair at my house for my kids, I don’t need somebody else’s kid that I have no idea who you are, or whatever. crying to me about fairness. I have a very deep appreciation for fairness. So don’t get me wrong. It’s not that I don’t like fairness, not that I don’t like equity. It’s not that I don’t like justice, and equality. These are all super important things. In fact, justice is one of my core values. One of my guiding principles in my life, I have such a deep sense of justice and the importance of justice. So it’s not that I don’t like these things, little Johnny. It’s just that I’m getting worn out. kids wear me out. And everything else wears me out. And all this talk of fairness and equity and justice. And this that and the other thing, I get it, I get it. I want it. But I’m just a little bit exhausted. I’m worn out and burned out on it. So still want to talk about it, though? That’s that’s a little weird, isn’t it? I’m so burned out. Why am I talking about it? Well, I guess I’m frustrated. I’m irritated. I’ve got something to say about it. Alright, little Johnny. So here we go. Fair is not same, fair is not same. And same is not possible. Nor is same. desirable. You don’t like the same things I do. Little Johnny, you and I for sure. Don’t like the same things I do. You probably don’t like hot black coffee. And I love it. I bet you don’t even like red wine. And that’s one of my favorites. I like going to bed early. And that’s probably one of your least favorite things to do in the entire world. You probably resist taking naps, and all I want to do is take a nap. So see, you think something’s not fair you want. You don’t want the same as me. You probably have different tastes in music than I do. You probably don’t like Springsteen, as much as I do. Probably have a different sense of style. Its music, art, sexual preferences. We’ve moved on from the little Johnny piece now just talking about people in general. We adults, humans don’t want the same things. Again, you have different preferences, different tastes, different wants, you like hip hop. I like whatever you like contemporary art. Maybe I like cowboy art. You like barbecue, I like Mexican food, you like that da you and I are probably a lot more different than we are the same. This goes for some of my best friends in the whole world. We’re way different than one another. And that’s awesome. Not only those preferences, but our ideas, our thought process, our thinking, it’s all good. You have different ideas tastes, you’d like to mountains, I like the beach. You like soccer. I think it sucks. You like guys. I like gals, you’d like vanilla chocolate. Again, you’re a little bit country, I’m a little bit rock and roll. So again, James and Jack, my seven and four year olds cannot shut up about fairness, and it’s everywhere else as well. So what is it? What is fairness? Have you ever? I mean, I think that we all sort of know, this is what fairness is, this is what equity is. But do you know what it really is? So I want to explore that a little bit. Then of course, we’re going to talk about how this applies to money and what the whole point of it is. So let me get there I promise that I will get there but in in the context of being just an equitable fair refers to actions, decisions or treatments that are free from bias, favoritism and injustice. It applies that all of us are given an equal opportunity and are judged or treated based on the same standards. That’s fairness. So okay, so again, everyone’s given an equal opportunity, and judged or treated based on the same standards. Sounds good to me, I am for that. So here’s some key aspects, impartiality, that decisions are made without favoritism or prejudice. For example, a judge listens to both sides of a case and makes a ruling based on the evidence and the law. but not on personal feelings or external pressures. Anybody think about scenarios where this is not necessarily taking place in our culture? What about what about equality? This is where everybody’s given the same chances and opportunities. Example is in a hiring process, all candidates are evaluated based on their qualifications and experience, rather than unrelated factors like gender, race or personal connections. Okay, interesting. But about transparency. This is where processes and the criteria that we’re using are clear and open to scrutiny. This helps to ensure that everybody understands how decisions are made, and on what basis reducing suspicions of unfairness. Where is this showing up? Where is this showing up in our culture, and the consistency, similar cases are treated in a similar manner? So if your school age person, your teacher, if they’re fair, applies the same grading criteria to all the students. That’s good, right? Yes. What about due process? Fair procedures are followed, allowing all parties to present their case and to be heard at work? It means having a formal process for addressing grievances where both the employer and the employee can present their perspectives. That’s a value, isn’t it? What about proportionality, that responses or punishment are proportional to the action? In the judicial context, this means that severity of a punishment should match the severity of the offense. Okay, cool. So the legal system, talked about that. We talked about the workplace, we talked about education. What about economics, a fair economic systems is trying, it’s working to provide everybody with equal opportunities to succeed, addressing issues that are like income inequality, access to health care and education. Okay, so that’s the conceptual idea of it. So how do you actually apply it? How do you apply that? It’s really hard. And it’s easier, really hard, and easier, apply and fair across vast numbers of people and places, like the United States of America, that’s really, really hard. It’s really hard. So many people, so many circumstances, so much nuance. So. But it’s not the same time. Because Because you do the things I just laid out, impartiality, no prejudice. gets easier. It gets easier in our interpersonal relationships within our families. But it’s still hard. It’s still hard. It’s still hard to establish a sense of fairness within my family with my four year old, my seven year old now there’s another one. And she’ll old enough, I’m sure soon enough, said she’ll hear my other two kids say fair, 1000 times a day, I’m sure that’s going to be one of her first words. So that they could get the idea. But it’s a lot more manageable, smaller numbers, but not to go too far off of the rails here or too far astray of what I was talking about. But that’s just what I’d love to do. It also makes me think a lot about justice. And we’ve been having a conversation a lot about social justice, which is a wonderful conversation to have. Individual justice is just a lot more straightforward. You look at the circumstances, noble information, and you make a determination. With social justice. It’s so much. It’s just it’s so much. It’s bringing in historical facts, and events, and systems and all of these things. It just it just makes it so much harder. But justice is as I mentioned, at the top, it’s one of my core values. And I again, I love the idea of Social Justice Kagan, my head or my arms around, how do you actually make it happen? Like fair and equity, it’s more easily accomplished on smaller scales. I think that proponents of, of social justice or equity, achieving that across large groups of people like an organization communities or even entire societies, it’s possible, but it requires comprehensive strategies, sustained effort and a commitment to systemic change. And, you know, if you think about that, I think one of the reasons that this is so hard, and that we’ve been struggling with it as a country for as long as we have is because we have new administration’s coming in to power and new ideas and it’s constantly happening and that commitment to system Change.

Anytime you’re trying to change something, do you think about your companies and the places you work in your family trying to instill or install a culture and standards. And if you want, if you want a culture of excellence, if you want to help, and live to a standard and help the people in your organization or your family live to that same standard, it does require sustained effort. And it’s just really hard. But that’s, that’s why this is hard. So achieving equity on a large scale does require substantial resources, time, money, effort, tension, the benefits, I think, you know, over time, since we are making the investments, hopefully they will outweigh the costs, leading to a more just productive and cohesive society that I think everybody who doesn’t want that, who doesn’t want a more just productive and cohesive society, I know that that’s something I do 100% want. It’s just, I’ve just struggled over time to figure out how to do it, which is part of the human experiment. So possible, while planning, making good decisions on you allocate resources. And when you do when we are making these decisions, we want to make sure that we’re not inadvertently disadvantaging other groups of people. Strive for fairness by addressing the needs that different groups have, without creating new disparities. So when you put more resources in one group, that just means that there’s less resources going to other groups. That’s just how this goes. Thomas Sol famously said, there are no solutions. There are only trade offs. When you say yes to one thing, you’re saying no to everything else. Just it makes it so hard. So when I think about it, I realize that it’s an Infinity War. It is an infinity war fighting what we believe to be systemic racism, or misogyny or whatever, patriarchy all these terms. There’s a lot of people out there who believe that these are existential challenges and problems that we must work to address. And because there’s people out there that are thinking that way, I’m here for it, too. I am interested in I’m a solution oriented and driven person, as I’m confident that you are as well, I am somebody who believes in fairness and equity and justice. It’s just that how it actually takes form and how we actually make the sausage or cook the breakfast or the omelet. That’s, that’s where we have our disagreements, but I’m interested in against solutions. So but what about equity? What is equity? It goes way beyond just quality by recognizing and addressing the different needs, circumstances and barriers that individuals and groups face. So I think first and foremost, need to recognize that we are different, because talking about that’s where nobody is the same. So you have your individual needs. And a big part of equity involves acknowledging that different people have different needs and may require different resources or support to achieve similar outcomes. I get it. So if you think about from a student standpoint, little Johnny, if you’re still listening, I was a little hard on you at the top, not going to apologize. From a student standpoint, providing additional tutoring for some students who are struggling, that’s great. make that available 100% addressing systemic inequities, tackling root causes equity seeks to address and rectify systemic inequalities and injustices that have historically marginalized certain groups. Okay. So biggest example of that potentially could be implementing affirmative action policies. All right. So we can have a future conversation on that the distribution or redistribution of resources allocated based on needs, resources are distributed based on the specific needs of an individual or community rather than be distributed equally to everyone. So an example of that would be allocating more funding to schools and underserved communities to ensure they have the same opportunities. Hey, so the ideas are all really good. It’s just the actual practice of it is so hard, it’s so tricky. And then create an inclusive environment. So ensuring participation and representation that involves creating environments where everybody feels valued, valued, respected and able to contribute. That’s awesome. So what’s an example of that? Try to ensure diverse representation and decision making bodies. So the perspectives are of all groups are considered. So I think that you can look at D AI as as the leading the most recent crack at this, the most recent attempt at this. And if you’re somebody who thinks that that’s going Awesome, that’s fine. We are questioning so many things. We’re questioning everything. You know, good, bad, worse, indifferent, terrible. Coming out of COVID, we have just questioned everything. We questioned how we educate our kids, how we police, our communities, where we work, how we work, public health, so much. So I am here for all the conversations. And I think that that’s that’s kind of the rub on this is we need to be engaging in conversations and engaging in genuine good faith conversations. I know I get really frustrated. Because I think too often that people don’t do that. People are really disingenuous, especially when it comes to these hot topic issues. And they don’t enter conversations or discussions in good faith. And then it’s a waste of time. And there’s nothing I think that’s probably the thing that drives me. The craziest is when we see when I see our politicians or bureaucrats or whatever, just being so disingenuous and covering their butts, I just can’t stand it. So there’s a lot, there’s a lot going on in equity in education and health care and at work and in the legal system. I think that equity versus equality, just briefly, equality that strives to treat everyone the same, providing the same resources or opportunities, regardless of the circumstances. So given every kid the same book. Another example is, or rather, equity is treating people differently according to their needs, providing resources or opportunities tailored to ensure everyone can achieve similar outcomes. So in that example, you give more textbooks and materials to students who don’t have access to them at home. So just to sum up equity versus equality, equity is about leveling the playing field by addressing the unique challenges and barriers that different individuals or groups may face. It’s a crucial principle for achieving true fairness and justice in society. So there you go, equity. Equality, given everybody the same thing, equity, giving individuals what they need. And this is why it’s so hard to do this across big numbers across the entire country that deliver equity, I think that that’s impossible. In fact, it is impossible. Maybe AI will be able to solve that for us probably say this is what George grombacher needs in order to be successful. And I’m going to get those resources. And this is what you need to get to where you want to go and you’re gonna get exactly those resources and everything will be equitable. All right. Back to fair, what brought this up. So there was this Wall Street Journal article on 401k matching, the title of it is for you, if you’re a journal reader, you can search for is your company’s 401k match.

Fair. So the thesis is that it’s not it’s is that it’s not that your company’s 401 K match rather, just 401k matching, as it stands right now, commonly, as we’re commonly do, it is not fair, that high earners get nearly half of the free money. And that’s a term that they used in the article he called a 401k, match free money. So there’s a lot going on here, first and foremost, a 401k. That match is not free money. This is not free money. 401k match, it’s part of your employee benefits package. And that should be an important consideration as you make your employment decisions, meaning you are evaluating the best fit for you to reach your professional goals and your financial goals. And all that stuff is this organization that I’m considering going to work for, am I going to get what I need am I going to get what I want by working there. So you agree to work at company XYZ under the understand they’re going to compensate you in a variety of ways. Your salary is 100%, one of those ways, but so too, are your other benefits, your health insurance benefits, your paid time off your whatever your ability to work remotely or hybrid, and your 401 K match. That is 100% a part of your employee benefit package. So am I splitting hairs on that? I don’t think so. I don’t think that it’s free money. This is part of the agreement. That is part of what you agreed to. So you have the choice to take advantage of it or not. I think it’s preposterous to not. And if you buy if you like think about as free money, then by all means do that. Don’t let me tell you how to think except I’m going to try to tell you how to think about some of this stuff. So the article tells us that half of the tuner billion dollars, so that’s interesting each year round, or at least currently, two and a billion dollars is the number that goes It’s contributed or matched from employer to employee. And that half of that half the 200 billion for those following along at home, that’s 100 billion, it goes to the top 20% of earners. Okay? So is that shocking? Well, it ought not be because the Pareto principle tells us that the 8020 rule 20% of your employees are going to do 80% of the work 20% are going to receive most of the money. That’s just always how it goes. You could try to fight that. But it is a principle for a reason. And it is a fascinating one, the way that things that things organized themselves, you get organized based on that. super interesting. So I don’t think that that’s much of a surprise to me at all. But it tells us that this just isn’t fair. That’s what the article tells not fair, not fair at Bear. You can hear your kids screaming that can’t you not bear, you’re more equitable, more people, be more equitable, if more of the money went to lower income earners. And from what I just laid out, from what I just laid out, that’s true. The idea of equity would be that you provide people with what they need to be successful, something somebody is making less money, give them more money. But meanwhile, in the real world, that’s not how it works. At least not how it works in our society. As it stands today, it may not be that way, a year from now or two years from now. But I believe that in a merit meritocratic society, meritocracy in a capitalistic society and economy, that’s how it goes, do the best, get the best. That’s it’s pretty simple, provide the most value get the most money. Maybe you don’t like that. But let’s zoom out a little bit. Let’s pull change the aperture pullback a little bit. And just in terms of employee benefits, like I just laid out the 401k matches is an employee benefit. Maybe you’ve never thought about it like that before. Here I go telling you how to think about stuff. What about your health care benefits? Should everybody get the same amount of benefits? Should everybody get the same amount? If you’re 55? Going through cancer? Should you be limited to the same amount, same dollar amount of medical care as a 22 year old healthy person? Of course not. You wouldn’t. That’s not That’s not fair, is it? Nor would it be equitable. So what do you think about that? Is that plan on these false dichotomies? Is that even the right term to use? Little Johnny, what do you think about that? Should you get the same amount? If you’re screaming that everybody should get Sim 401k match? Well, then everybody should get the same amount of health care benefit. Okay, you probably don’t agree with that. Okay. So here’s something else to chew on. Under secure act 2.0, which is just new legislation that changes how how retirement benefits are organized and paid out and stuff like that. Employers may not treat employees student loan payments as elective deferrals for the purposes of matching contributions. So if you are making student loan payments, you are now able at your company is now able to view those payments, as though you are making contributions into the 401k. So, employers offered a 401 K 403 B, a simpler IRA, IRA or 457 B plan can match or they could choose to match against an employee student loan payments instead of the elective 401k paycheck deferral. So student loan matching employees with student loans may receive a retirement plan match, even if they don’t contribute directly to the retirement plan. Okay, so what do you think about that? That’s interesting. So let’s take this one step further or sideways step, however, you want to think about it? What if you don’t like the stock market? What do you think it’s rigged? What do you think it’s a casino to Wall Street Casino? What if you choose to put all your money that you are allocating for to accumulate assets for retirement? But if you choose to put that into real estate, or precious metals or crypto, whatever, instead of making a 401 K contribution, should you receive the match in that scenario? Maybe, yes, no. I could tell you who won’t like that. Who wouldn’t like that? Very much. Mm hmm. Those folks with all the money. I might Yeah, let’s let’s just go in there. BlackRock stay street Vanguard. They wouldn’t like that at all. I can’t believe that they let the student loan thing get in there. I’m shocked by that. They want all the money. What do you mean, you want to put it somewhere else? And you still expect us to give you more money? No way. But the idea of the 401k is to help people accumulate assets for retirement. Not make you rich, BlackRock, that’s not what it’s for. Spoiler alert. So with that in mind, does it make sense to be able to, should you get matched if you believe that you want to build a huge real estate portfolio, you want to do crypto or whatever? You still get a match. Is that fair? Is that equitable? Is that equal? Like going on there? Going on there? Maybe ask your kids. Little Johnny, do you think that’s fair? Tell you what, I’ll ask mine. You ask yours. We’ll reconvene. circle back on this one. There is not same. Same is not possible nor is same desirable. Let’s all exercise some common sense. put in place a little perspective and move forward. Practically. We can amuse ourselves with thought exercises but let’s not throw the baby out the bathwater in pursuit of same. Finally, a friendly reminder there’s never going to be anybody more interested in your financial success than you are. So act accordingly.