If you're young and ambitious, you shouldn't over-invest in retirement funds.

Yes, even though they're tax free and have a crazy ROI compared to other investments.

Here's why πŸ‘‡
When I was 23, I got fired from the only real job I've had.

Instead of looking for a new role, I spent the next year traveling, learning, and focusing on growing my site.

I was making maybe $1-2k a month passively, but I didn't need to make much.
Why? Because I had a lot of cash.

I'd saved aggressively while at that job, and some of my previous side projects (like this one) had given me a bunch of extra cash to sit on.

I hadn't followed normal financial advice. I maxed out my IRA, but that was it.

My job didn't have a 401k, and I didn't fill my SEP IRA from side income.

I just hoarded cash. And it turned into enough cash to spend a year learning, exploring, and figuring out what to do next.
If I HAD followed the standard advice, I would not have had as much of a cushion for that self-education.

It would have been locked up in retirement funds that are expensive to cash out, and I would have felt much more pressure to find a new job.
If I'd jumped into another job, I wouldn't have started @growthmachine__ and my site wouldn't be where it is today.

The ROI of tax-advantaged funds is great.

But the ROI of investing in yourself can be much greater.
I think I had ~$30,000 in cash. If I had put that into a retirement fund 100% in the S&P 500, it'd be worth $54,300 today. 1.6x. Not bad!

But by investing in myself, that $30k turned into... more than 10x that.
Most people want the same things in their work & financial life:

1. To have the freedom to say "no," to work, people, places, anything they don't like.

2. To do fulfilling, self-motivating work.

3. To make enough money to not worry about money.
I think they come in that order.

You need to have the freedom to say no in order to find fulfilling work.

And you need fulfilling work to reach the point of not worrying about money.
How do you get the freedom to say no? Cash.

When you have a year of living expenses in the bank, you're free.

When you're living paycheck to paycheck, you're trapped.
Compounding interest is great, but it's better when you start with a big number.

And the fastest way to hit a big number to compound on is investing in yourself, and rapidly leveling up how much value you can bring other people.
I still keep 25-30% of my NW in cash so I can jump on new opportunities and learn new things.

Cash is how you keep learning, keep growing, and keep expanding your capacities.
So my advice to ambitious young people?

Hoard cash.

If your company has a 401k match contribute enough to get that, and if not, do an IRA, but then just hoard cash.
Save enough till you have a year+ in living expenses.

At that point, you'll be free to take the time you need to invest in yourself and rapidly level up your earning potential.

The market can't beat the ROI on learning.

β€’ β€’ β€’

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More from @nateliason

14 Oct
πŸŽ‰πŸŽ‰πŸŽ‰ Announcement! πŸŽ‰πŸŽ‰πŸŽ‰

I'm joining @danshipper @nbashaw @adam_keesling @fortelabs and @ljin18 in The Everything Bundle to launch my new publication, Almanack.

It's a semi-weekly deep dive into getting healthy, wealthy, and wise.

More details & how to get it πŸ‘‡ Image
First off, if you wanna join the Everything bundle and read my new post:

"The Mental Model Behind Every High-Performer I Know"

We're doing 25% off for 24 hours to celebrate the launch!

You can get access here: everything.substack.com/subscribe?coup…

So why am I joining Everything?
If you're not familiar with Everything, it is the future of online publications.

They identify the best writers online discussing work, productivity, and finance, and add them to their list of publications that you get access to for one monthly fee.
Read 9 tweets
24 Sep
My $4,505 in Bedroom Tech 😱

I've been obsessed with improving my sleep quality for 9 years since I first realized how insanely important it was.

I've tinkered with tons of products, and now have over $4,505 worth of tools helping me sleep.

Here are my favorites πŸ‘‡
The @eightsleep Mattress πŸ›Œ


I've tried most of the "cold bed" solutions and this is the only bed I've slept in where I don't regularly wakeup in a pool of sweat (yuck)

It gets COLD, is super comfy, and I miss it dearly when I'm away from home.

The @ouraring πŸ’


The best tool I've found for monitoring sleep quality and recovery.

Extremely useful for seeing how lifestyle changes are affecting my sleep and for giving me rapid feedback on what's aiding or hurting my physical recovery.

Read 10 tweets
16 Sep
One common thread among all the really successful and productive people I know is they have a "systems mindset."
As soon as they do the same thing more than a few times, and that thing is not $1,000 per hour work, they start to think about ways to automate or systematize or delegate it so they can focus on something else.
Sometimes this manifests in small ways: I type in my email all the time, so I set up a hotkey in TextExpander to type my email in 3 characters instead of 20.
Read 12 tweets
10 Sep
Really enjoyed "Scale" by Geoffrey West, @TheRealNeilS will be releasing a Made You Think episode on it soon.

In the meantime, here are a few of my favorite ideas from it πŸ‘‡
We somewhat naively assume that all aspects of complex systems scale linearly, but there's usually a "scaling exponent."

As the size of something changes, other parts of the system change in a non-linear way.
"if the size of a mammal is doubled, its heart rate decreases by about 25 percent"

"with each doubling of population size, a city needs only about 85 percent more gas stations-and not twice as many"

"like organisms and cities, companies also scale as simple power laws"
Read 12 tweets
8 Sep
If you pay $3-5 a day for a bit of caffeine to help you be more productive why would you spend anything less than $100+ per month on your key productivity tools
It blows my mind when people complain about having to pay $15/mo for @RoamResearch.

If you make $20 an hour and it lets you be one hour per month more productive you've got a good ROI.
Free software like GDocs just messed with people's heads around paying for software.

But now that we know free = data mining, privacy violations, and mental hijacking via ads, go paid whenever possible
Read 4 tweets
26 Aug
"there is a very small fee to cover production costs" Image
Can't help myself Image
LOL Image
Read 4 tweets

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