The Stalk Market and Investing

Ian takes a moment to compare Animal Crossing's infamous Stalk Market, the buying and selling of turnips, to real-world investing. One more note: There's no diversification in the Stalk Market! Only turnips.


What's up Internet? My name's Ian Bloom. Welcome to Nerd Finance. I'm your resident financial life planner and huge nerd.

Today, we are continuing our second video in the Animal Crossing series. And this one is on the Stalk Market, one of the ways to make money in Animal Crossing. I think it's kind of interesting to point out some similarities between investing in Animal Crossing and investing in real-life, as well as a couple of differences, so that's what we're going to dive into today.

You see, the way you play the Stalk Market in Animal Crossing is on Sunday mornings a woman by the name of Daisy Mae will show up on your island. She has turnips that you can buy, and her turnip prices are different for you to buy every week. They might be 50 bells or they might be 115 bells, and that is the price at which you buy. Throughout the week, Timmy and Tommy, the shop owners in town, will have different prices that you can sell these turnips at. They might go as high as 800 or they might be as low as 35 bells. And you have to somewhat time your buying and your selling in order to make a profit.

Now, there are different patterns that play out in this market, but without doing a ton of research and using online calculators you can effectively assume that the turnip prices are random. And that is kind of similar to the way that we invest in the real world. See, prices, within days, change rapidly and quickly. You have to, if you're going to make trades on the same day, be very, very aware of what's going on. And also, the entire time that your money is invested in turnips, much like in real-life when you're investing in the stock market, your money is tied up. It can't be used for anything else. So if you wanted to build that bridge in Animal Crossing, you're going to have to fund it with bells that you get from a different way.

Now, let's touch on some of the differences, because I think these are very, very important differences. The first big difference is that in Animal Crossing your turnips expire, as in they are no longer usable and valueless on the same Sunday one week from when you bought them. And that is a problem from an investing perspective. That means that you have a crunch of time that you have to worry about in Animal Crossing, which very rarely do you have to worry about in the real world.

You see, you can invest in the real world from times starting at one day all the way up to 30, 35, 40 years, and that is where we get our edge in traditional investing. You can hold onto investments for a very, very long time, and thankfully in the modern economy, historically it shows us an upward trend. So even if you have a down period in the market you're likely to see up time later.

Another difference between real-world investing and investing in Animal Crossing is patterns. You see, in Animal Crossing, once you understand them, there are very specific patterns that you can use online calculators for to determine what your yield will be for that week, based on the first three or four prices that you get from Timmy and Tommy on Monday and Tuesday. And that is a benefit that we don't really have in the real world.

The stock market is a largely emotional entity and can be impacted by any number of factors. Take the coronavirus for instance. We have seen big drops in the stock market that even though we were, what some would say, due for the next downturn or recession, we never knew what would be the cause of it or why. And so, these sorts of things are much less predictable, so to speak, than what is going on within the Animal Crossing world, at least mathematically.

Now, that does not mean that historical data does not suggest a pattern of upswings and downswings in the market. We can look at that and draw conclusions about when investing is a good or bad idea as a result of that. But that all being said, there are some differences.

So to wrap up some of the similarities between the Stalk Market and the stock market are that prices change very quickly, and that your money is tied up within the system while you're investing. On the other hand, some of the differences are that our investments don't expire in the same way, unless you're investing in options contracts, and there is less of a pattern to the way that the stock market performs than maybe the very predictable calculator math style pattern that's in Animal Crossing. But it's still really cool to think about the idea of investing X and getting Y. And so, I think that the Animal Crossing Stalk Market is a really interesting addendum to an otherwise kind of less rigid game.

I hope that you enjoyed this video and that you learned something from it. Have a wonderful day, and thanks for watching.

What Can Animal Crossing Teach Us About Planning?

Ian runs through what Animal Crossing can teach us about planning, both in financial planning and in life. The three steps are to understand where you are and where you want to be, to develop a set of action items and execute, and then to monitor your ongoing progress and adapt. Animal Crossing asks you to do this with your island, life just asks you to do this.


What's up, Internet? My name's Ian Bloom. Welcome to Nerd Finance. I'm your resident financial life planner and huge nerd. I kind of missed saying that by the way.

So today we are kicking off a three-part series about Animal Crossing. And it's not entirely about Animal Crossing in the sense that we're going to take some lessons from the Animal Crossing series and apply them to financial planning and life as we do on this channel. But I thought Animal Crossing was a pretty interesting game to bring up because, well, if you've been watching this channel for a while, you know that I adore the Nintendo Switch. I did a whole video on it. And I also really think that Animal Crossing is that perfect marriage of the creativity I enjoy and some relaxation to help you get through this trying time.

So let's kick off with the first lesson we can take from Animal Crossing, and that is having the ability to execute on a plan. See, Animal Crossing asks you a pretty important question throughout the game, which is what is the ideal island for you? And in order to create your ideal island, you're going to have to do three important things, which is coincidentally the same three things that you have to do to execute on any plan. The first is to have a vision for how to get your island from where you are today to where you want it to be in the future. You have to decide what you want your island to look like and then have the ability to see how you can get it between those two points.

The second part is execution, so you have to do whatever the tasks are necessary, maybe move some rivers, plant some trees, move some houses, those sorts of things in order to get your island exactly where you want it to be.

And then finally you have to adapt or iterate. You see, Animal Crossing, much like life, has changes built into it in its very nature. Animal Crossing had a patch come out this week that made a lot of people with really big gardens on their island feel very, very tilted because it added bushes to the game, which were previously not in the game. And so nobody had built space for them in their gardens. Well, now you have to have bushes. No big deal, right? It's an added feature, but it's so many people upset because they weren't ready to prepare for new items coming into the game.

So in any case, that is basically the process that we use for financial planning. Three steps. You are going to start by having a really good understanding of where you are today and where you want to be in the future. And a good financial planner will take you through that journey and help you answer those questions.

The second thing you're going to need to do is once you've identified the difference between where you are today and where you want to be in the future is to develop a list of action steps and execute on them. Very simply, you just need to do the things that'll get you from A to B.

And then finally, you have to adapt to changes. Our current situation is a perfect example of situations that you need to adapt to in life. Things do change. Right now we're all in social distancing because of coronavirus. That's why I'm recording outside. I figured it'd be a nice change of scenery. And so your plan has to be able to be adapted for those changing circumstances. That iteration is what actually makes financial planning special. Having somebody in your life to help you adapt to those changes is the powerful part.

So anyway, I hope you learned something from this video. You got two more Animal Crossing videos to look forward to. Thanks so much for watching. And I hope you have a wonderful day.

Look For Joy

I want to start off by addressing the obvious. Writing is hard right now. Creativity has been difficult for people across the spectrum of my profession, as we are seeing the same things everyone else is seeing - infections, job loss, and confinement. These things have their effect on our lives. That said, much like joy, creativity is something that you can latch onto in these difficult times as a reminder that removing one’s freedom of movement does not remove their freedom of expression.

Creativity and joy have a lot in common as it turns out. Both are things that have an aspect of intentional action and an aspect of emotion. Both are rare right now, but both are very much needed. So let me tell you some stories about joy from this week.

This week a client of mine asked permission to do something that was a part of his ideal life. He’s been seeking a dream car for a while and every time he talks about it, his smile gets a little bigger. This week he told me he found it. The Porsche 996 C4S that he wants is available.

Clients don’t come to me just because they want to be financially successful. They come to me because they feel a misalignment between their current actions and the life they want to be living. For this client, he was now living in alignment with where he hoped to see his life go, and it shone through him in pure joy. I told him he could have the car whenever he was ready to buy it. The light got even brighter. Then we began to figure out the details. Following the conversation, he was so excited that he emailed me pictures of the car! Which I loved, because I love cars and I love seeing my clients happy.

This week a separate client of mine came back to me with a simple statement. “I’m retiring at the end of July. Or at least, that’s my plan.” We sat down for the first time in a while with the intention of actually figuring out what was possible. It turns out, we’d made an accidentally amazing thing happen. His portfolio, last year composed largely of his employer’s stock, was diversified at the end of the year last year. It was barely down as of yesterday, which is amazing given market conditions. Better yet, we’d created an intentional cash reserve for when he decided he was ready to retire. He wouldn’t have to blow up his portfolio to step away from work.

The relief and joy that washed over my client’s face was heartwarming. This was the moment he’d been hoping for since we started working together. He could step away whenever he was ready, like at the end of July. Now we’re just going to work on the finer details of his retirement, such as which health insurance he’ll be taking. The money is all there, and so is the excitement.

This entire post may seem like a humble brag. “I’m so great, I help my clients do amazing things!” I do help my clients do amazing things, but it’s because they’re great. Not me. I simply wanted to take a moment amidst all of this chaos and change to highlight that amazing things are still happening every day. Life has changed, but it is not all doom and gloom.

Hopefully this post encourages you to seek out your ideal life. Look for joy. We’re all craving those highlights right now, and I’m sure if you shared yours, they would be celebrated.

If you aren’t experiencing highlights, let this be a turning point for you. Seek the personal or professional help you need. Make a plan for how to get those moments filled with joy. And if you don’t know how to make a plan, my colleagues and I are here to help.

Finally, I wish you all the best during these tough times. Stay safe and healthy.

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