Thread by @mrstingy2014

12 Important Lessons I Learned From "Just Keep Buying." 📕

"Just Keep Buying" is @dollarsanddata's first book.

Nick was kind enough to share me an advance copy.

Here's 12 of the most important lessons I learned from reading it:

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1. Focus on saving or investing?

Depends on how much money you're making.

If you can only invest $1,200 a year (i.e. $100 a month), even making superstar-level returns of 20% isn't gonna bring you financial freedom.

At the beginning, focus on being able to save more.

2/15

2. Which is more powerful? Cutting expenses or increasing income?

Cutting expenses is easier, but you quickly reach a limit.

Increasing income is harder, but critical for financial independence. ✅

Some ideas: side gigs, promotions, or getting a higher-paying job.

3/15

3. How to spend money guilt-free

Use the 2x Rule:

"For every dollar I splurge, I have to invest an equivalent amount."

"Or give it to charity."

Maximize fulfilment — which is different for different people.

The best way to spend money is what works for you.

4/15

4. How much lifestyle creep is OK?

You can't eliminate lifestyle creep. That's unrealistic.

For most people, you can safely spend 50% of your income raises.

Spend any more, and you'll start delaying retirement.

(Read the book for mathematical proof.)

5/15

5. Retirement and the 4% Rule

The 4% Rule: If you can live on 4% of of your investment portfolio per year, the money should last you >30 years.

The inverse of this rule is often used to calculate: "How much do I need to retire?"

Retirement number = 25 x annual expenses

6/15

5A. Does the 4% Rule still work?

Introduced in 1994, many question if the rule still works today.

Nick says yes — research shows many retirees actually 5x-ed their money.

For many, retirement is more an existential crisis ("What's my purpose?") than running out of money.

7/15

6. Why invest? What to buy?

Because my abilities won't last forever.

Stocks are historically the best place to invest. (Tough to beat the S&P 500.)

Doesn't mean you should invest 100% in stocks.

Diversify to cover for bad times.

8/15

7. 2 reasons why you shouldn't pick individual stocks

Financial reason: The majority of pro money managers can't beat the index. Can you?

Existential reason: How do you conclusively know you're a good stock picker?

For most people, there's too much luck involved to tell.

9/15

8. When should you invest?

Today.

"Most markets go up most of the time."

Don't wait to buy the dip. Even perfect timing can't beat time in the market.

Refer article: "Even God Couldn't Beat Dollar-Cost Averaging"

ofdollarsanddata.com/even-god-could…

10/15

9. Luck matters A LOT in life

Sequence risk is the risk of bad timing: markets crashing just as you retire.

Negative returns towards the end of your career hurt you the most.

Defend against bad luck:
- Diversify your investments
- Have lower-risk assets as you get older

11/15

10. How to deal with market crashes

Just keep buying.

Buying when there's blood in the streets allows your money to grow the most.

Historical data from 39 developed countries showed an 88% chance stock markets continue to go up.

No guarantees, but good odds.

12/15

11. When to sell?

The most difficult question ever... because FOMO.

Take your emotions out by creating a "selling framework" before you need to sell.

Nick will only ever sell to:
- Rebalance his portfolio
- Exit a losing position
- Meet some immediate financial need

13/15

12. The real purpose of investing

To live a life you wanna live.

Money dominates our thoughts, but time is your most important asset.

You will never feel rich.

The trick is to not forget all the people looking up at you, wishing for the life you already have today.

14/15

"Just Keep Buying" is now available on Amazon 🇺🇸, Kinokuniya 🇲🇾, and leading bookstores internationally.

Check it out today!

Longform article (with more nuggets of wisdom) here: 👇👇👇

mr-stingy.com/12-important-l…

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