* [Low] Fee’s
* Risk Management
1. Plan to own it for 10+yrs
2. Strongly desire the lifestyle (especially understandable if u have a family)
3. Acknowledgement that u may not make money off it
Its hard for me to be concise when it comes to homeownership 😥
Have u thought about the opportunity cost of the down payment?
For investing, this means to buy & hold low cost broad market index funds primarily.
Simple, cheap, and clear!
Now seems like the right time to intro crypto. Yes, Ive been stuck in the rabbit hole.
Buy some $BTC or at least learn about it: amazon.com/Bitcoin-Standa…
Remember, cycles.. Things will take a turn down, but when? Im more on the sidelines now than the past 3yrs, which may be a bad decision. We’ll see.
Long time horizon w/ a windfall? May be better off not DCA if u can stomach it:
Diversification is key. Diversify investments across industries, geographies, etc. Diversify income streams. Diversify hobbies.
Diversity lowers risk.
Complex, hard to understand products are not better. Similarly, more expensive doesn't always mean better either.
‘Marry 1 frugal spouse who shares ur dream of becoming financially independent. Weddings are about love & divorces are about money. Make sure that u & ur beloved r on the same page financially before signing up 4 life.’
It’s the big things. Cars 🚗, houses 🏡 (size, location), college 👩🏽🎓, expensive brands...
* Tax-Free: Pay taxes on the income now, withdrawal investment tax free later.
* Tax-Deferred: Defer taxes until withdrawal, ideally when ur in a lower tax bracket.
* Taxable: Withdrawal at any age without penalty. Pay taxes on the income in the year received.
Roth: Taxed now; not at withdraw.
Traditional: Decrease taxable income now; pay taxes at withdrawal.
There r Traditional IRAs & 401ks.
There r Roth IRAs & 401ks.
Its likely wise to contribute to a Roth 401k if avail & to a Roth IRA if eligible (under the income limit).
* 401k/403b: Employer sponsored retirement plan.
* IRA: Individual retirement account.
* HSA: Health Savings Account.
* 529: College savings plan.
All of these tax advantages account types have unique eligibility requirements, limits, and benefits.
Consider contributing if u know you’ll have a kid(s), believe in the future of college, and are maxing out elsewhere.
Be advised: Food, vet visits (always $200+), boarding for vacations, early mornings, random vomitting, mucho 💩...
FWIW we have @NationwidePet
His philosophy stressed investor psychology, debt minimization, buy-and-hold investing, FA...
Buy the 📙: amazon.com/Intelligent-In…
* Know they can get ripped off easier by a dude with a pen than a gun
* Think IPO stands for ‘It’s Probably Overpriced’
* Understand margin of safety
* Refuse to spend too much for an investment
& so much more. Such a great book.
@StatusMoneyUSA enables you to anonymously compare net worth, spend, and income by age range, income range, geo, etc...
* Cant borrow💲as easily for retirement as 4 education
* Can borrow against 401k if really needed
* IRA earnings can be withdrawn penalty free 4 education
* Roth IRA contributions can be withdrawn penalty free + tax free
My budgeting & investing decision making process revolves around positioning myself to
*comfortably withstand extended bear markets (or job loss)*
Make sure to review/update it every few years. Tragedy strikes unexpectedly & it’s unfair for younger 1s left behind to have to fight for what you’d want.
If u decide to speculate or trade (public stocks, crypto) then the rule of thumb is to limit the amount to < 5% of your portfolio.
I think of it as much as a mindset. It takes patience, humility, and strength 💪🏽.
Credit cards 💳 are great:
* Builds credit
* Sign up bonuses = very valuable
* Buyer protections
* Dont need to carry cash (phsyical security)
* The Capital to Income Ratio
* Savings Ratio
* Debt Ratios
* Investment Ratio
* Life Insurance Ratio
Buy the 📘: amazon.com/Your-Money-Rat…
* A little friendly competition can be healthy
* Consolidation requires high [enough] switching costs with little upside
* Treat as 1portfolio
More details: quora.com/How-do-married…
4. The Business
Buy the 📙: amazon.com/Four-Pillars-I…
Read it a while ago, but I attached a screenshot of my notes.
The decision far from just money driven, but 💲 is certainly a factor.
* [Try] Choose a fulfilling career path
* Understand at-will employment
Feeling fulfilled is very valuable💲. Obviously most people dont really 'choose their path' (myself included). But its a luxury to not hate work.
U won’t get what u don’t ask for. Ask for what u want. Ask until its beyond uncomfortable. Be told no and ask again.
Basically, u can leave & they can let you go. Don't be scared by it; embrace it.
I view huge companies as risky, ready to do layoffs at any moment.
I break startups into 2 camps: pre & post product/market fit. Post is really just a small company to me.
I'm not educated enough yet to 'take a side', but I have to say that fractional reserve banking seems & feels... icky.
The only none finance book I'll mention in this thread is called "Grinding it Out - the Making of McDonald's" by Ray Kroc himself.
As inflation increases, each $ buys less. If its 2% in a year, u should demand a raise of at least 2% to keep up.
Concisely explains a driving force behind everyones actions; especially sales forces. Be wary of what anyone is selling u, or advising you of. Try to understand what their incentives are 🔎.
* Systematic: aka Market Risk. Reaction of individual stocks to market swings.
* Unsystematic: Variability independent from the market movements. Result of factors peculiar to an individual company like accounting fraud, labor trouble, etc.
For me at least. It’s so much simpler and safer that way.
Calculated by averaging your top 35 earning years (adjusted for inflation).
But dont count on receiving it if you’re young. Even if u end up getting some of it, its better to plan for not getting any. Which sucks... because u contribute a lot to it..
@mflaxman has you covered. His epic post covers many of the same topics + more (investing, taxes, asset classes, robos, psychology, timing, credit cards, life insurance...)
This 1 from Semper Augustus is 🔥
“Mistakes in life and in investing make you better, particularly if you force yourself to learn from them... Hard work makes you better, but it only allows you to keep up.”
We did a destination & it was significantly cheaper 👰🌴