Dear Financial Samurais,
The S&P 500 just wrapped up its best May performance since 1990, gaining 6.2%. Volatility has calmed, but uncertainty remains—particularly around trade progress and the sustainability of earnings growth. Since earnings are the lifeblood of stock market performance, I wanted to share two key charts.
The first chart highlights earnings growth expectations for Q2 2025 and into 2026. These forecasts are lofty. Happiness is about managing expectations, and beating them.
The second chart shows that U.S. corporate profits grew by 5.5% year-over-year in Q1 2025—the slowest pace since Q3 2023, but still respectable by historical standards. Could we see a re-acceleration in Q2 and beyond? Possibly. But if consumer spending pulls back in the second half of 2025 due to higher prices and persistently elevated interest rates, I have my doubts.
Draw a regression line through the second chart and you’ll see that 5%–10% annual earnings growth is the long-term norm (not 26% YoY). Yet with the S&P 500 trading at roughly 22x forward earnings again, the risk/reward looks stretched. Higher valuations imply higher earnings growth expectations, which may not materialize.
As a result, I remain neutral on equities, maintaining a ~60/40 portfolio split between stocks and bonds/cash. That’s a typical allocation for a traditional retiree, which aligns with my current risk tolerance. If the S&P 500 continues to rise, great—I’ll participate. If we get a pullback, my downside risk is more contained. There’s also a decent chance the 10-year Treasury yield has already peaked at 4.6% and could drift lower if growth slows.
This is real money for me—money I live off. I don’t have the luxury of pontificating about the markets without skin in the game, or relying on a day job or working spouse to smooth out the bumps. Every allocation decision carries real-life consequences. So I stay cautious, realistic, and invested.
The Choices You Make Are Yours Alone
After getting plenty of feedback about how I should spend my money this summer, I felt compelled to write a post: The Choices We Make To Achieve Financial Independence Aren’t For Everyone. The truth is, on your path to financial independence, people will judge and criticize you for saving, investing, or simply doing things differently. But if your choices help get you to where you want to go, ignore the noise.
Since my son was born in 2017, I’ve chosen to wake up by 6 a.m. to write for 1–2 hours and write before beginning my day as a stay-at-home dad. Now that both kids are in school full-time, I still wake early to write before taking them to school.
Every choice we make—how we spend time, money, and energy—is ours alone. And only we and our families have to live with those choices. Most of us make rational long-term decisions. If we wanted to make more money, we’d work more instead of play golf last Friday like many of us dads did after a learning celebration event. If we wanted more spending money this summer, we’d have bought the dip instead of letting cash sit in a steady state.
Still, I know people will always judge. That’s why I recommend building your fortune in silence. Let your life speak for itself.
There Is Way More Money Out There Than You Know
I’ve been writing about the Bank of Mom & Dad phenomenon—where parents help their adult children buy everything from groceries to homes—since 2009. Sixteen years later, the trend has only become more ubiquitous, fueled by an even wealthier generation of parents thanks to a historic bull run.
When I was 25 and didn’t have kids, I used to feel annoyed watching peers buy $500,000+ condos and homes with parental help. But I also got motivated to work harder, save more, and invest aggressively just to keep up. Too proudly, I believed it was better to earn everything you deserve. Wasn’t 18 years of care and four years of college enough support?
But after living next to stay-at-home sons in every neighborhood I’ve moved to, I’ve come to accept that parental financial support is simply a part of life—and a growing one. As more parents grow their net worth beyond what they imagined, many are using their excess to help their adult children while they’re still alive, not just in their wills.
So here’s the reality: if you’re planning to buy a home (or any big-ticket item), you’re not just competing against dual-income households—you’re often also competing against their parents’ money. I’d estimate there’s a 20%–40% chance that a competing buyer has parental backing.
Given this, saving and investing on your own is no longer enough. You have to think in terms of building generational wealth.
Because now that I’m a parent, I get it. There’s little a parent won’t do to help launch their kids into adulthood. We might talk about letting them work minimum wage jobs or couch surf for life experience. But after years of them struggling—especially as AI eliminates more job opportunities—I’m confident most parents will step in to help financially.
The multi-trillion-dollar wealth transfer isn’t coming. It’s already here. The sooner we accept this reality, the better prepared we’ll be.
Check out: Rich Banks Of Mom And Dad Are Everywhere – Accept And Adapt. Oh, and try not to shoot the messenger.
Middle-Class Multi-Millionaires
Finally, as part of my Millionaire Milestones consulting promotion, I’ve had the opportunity to speak with dozens of you about your finances. One interesting realization? Everyone who’s taken me up on the offer so far is already a millionaire. This insight has sparked an idea for a future promotion specifically geared toward non-millionaires.
But here's something else I noticed: several of you aren’t just millionaires—you’re middle-class multi-millionaires who’ve never earned eye-popping salaries, yet have managed to build far greater net worths than the vast majority of the population.
One of the biggest criticisms of the modern-day FIRE movement—which I helped spark in 2009—is that it’s only achievable for high-income earners in tech, finance, consulting, medicine, and so on.
Over the years, I’ve done my best to spotlight people who’ve maxed out their 401(k)s on modest incomes while side hustling their way toward early financial freedom. Still, I know many remain skeptical that they, too, can build substantial wealth and retire early.
So here’s another inspiring profile to help shift that belief: meet Luis, a long-time reader and consulting client. Despite averaging less than $100,000 in annual income over the past 30 years, Luis has built a multi-million-dollar net worth.
Read: The Rise Of Everyday Middle-Class Multi-Millionaires
Whether you think you can or you can’t, you’re right—so you might as well start believing in yourself!
To Your Financial Freedom,
Sam
P.S. I’m flying out to Hawaii on June 15 for five weeks, so I’ll be pausing my consulting promotion starting that day. It’s been a pleasure connecting with so many of you, and I’m looking forward to taking a relaxing break during this trip.
That said, around August 1, 2025, I’ll be launching a new limited-spot promotion specifically for readers who haven’t yet reached the $1 million net worth milestone. Stay tuned!
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