What I track, where, and why

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One of the first recommendations of personal finance is often to take stock of all of your accounts and track your net worth over time. While it’s widely known that this entails a summation of your assets minus your liabilities, not much additional insight is given toward the detail of information that is useful and practical to monitor over time. There is no right answer to what this tracking should look like for any individual, but here is what has worked quite well for me after dozens of tweaks over the years.

Where I track

There are…

Simple steps that help you benefit from the economic machine

Make your daily decisions work for you in the macro movement of wealth

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“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” — Albert Einstein

I’ve heard this quote a million times, but I’m not sure I fully internalized it until I took greater ownership of my finances and became more conscious of my cash inflows and outflows. It’s a bold statement that goes well beyond the egregious interest rates on car loans that nobody should pay, or the fact that earnings in the market can multiply…

There is massive asymmetry of risk and reward, and it’s in your favor if you do it right…

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Ever sat in an artificially lit conference room discussing mind-numbing details that make you question your existence? If so, chances are you have probably done at least some rudimentary math to determine how much money you would need to not have to do it anymore. This is generally referred to either as your FI (Financial Independence) number or more bluntly as having “F.U. Money,” as in you can literally walk out the door shouting obscenities with minimal repercussions to your financial security…

Buying 500 companies in a single country isn’t very diversified at all

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Diversification is one of the first principles of portfolio management. Intuitively, we know that putting all of your eggs in one basket carries inherent risk and puts too much of your financial security at the whims of a single company or asset.

One of the more commonly recommended sources for diversification is to buy an index that tracks the S&P 500 due to its reliably strong performance over the past several decades. While this is certainly better than having no diversification at all, it still concentrates assets to…

Knowing why will help us change our behavior

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Most advice in the personal finance community is relatively simple in theory but not necessarily easy to follow. Even some of the most fundamental tenets of sound personal finance advice are things we KNOW to be advised for a good reason. Yet, sometimes we just can’t help ourselves from giving in to the temptation. Here are a few of the most common investment decisions we know are ill-advised but have trouble avoiding.

Timing the market

Timing the market is when we buy or sell investments, typically those tracking broad market indices, based on WHEN we…

Even though I know the math favors putting that money in the market…

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My wife and I bought our house in 2019 in the Bay Area. While that immediately signifies a massive purchase price, we secured a home we love for under the median price for the region. As we conducted our home search, we knew we would aim to buy far less house than we could afford, with aspirations of early financial freedom.

We ended up buying our home for only 35% of what we were pre-approved for. …

The principles behind favorable outcomes are surprisingly similar

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Like many who read about asset allocation, I have been a personal finance junkie for years. I also happen to be a raging fantasy football nerd. Over the years I’ve found that my interest in both domains are tied to optimization, predictive analytics, portfolio theory, and superhuman people doing superhuman things. Because everything in the personal finance space is so serious, here’s a change of pace with 6 similarities between asset allocation and fantasy football…

1. It’s about maximizing the probability of portfolio return

Different asset classes have different levels of risk and expected return. All that matters in the end…

Tips to plan for both income and growth, even in a downturn

Safeguard your plans and expedite your timing…

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Those well entrenched in the mindset of financial independence are undoubtedly familiar with the core tenets of it, including the 4% rule, the (favorably) asymmetrical cost/benefit relationship of index funds, geo-arbitrage, and the importance of tax optimization. There is endless content on those aspects of personal finance, so I won’t discuss them here.

What I’ve found more interesting in my own journey and in observing others is that even with textbook navigation of those aspects over years or decades, there is one massive risk that can derail even some of the most prudent…

Evaluating the risks and opportunities of a battered stock market

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Stock market crashes are scary. Even if you’re a longtime student of personal finance and objectively understand that bear markets are healthy, every massive drop feels like an unusual circumstance that could be different and more crippling than all the previous ones — and someday that may actually be true.

As many non-essential businesses are temporarily (or permanently) closed, with their respective owners and employees out of work, obviously, the priority for those most directly affected is to simply tread water by whatever means possible.

However, if you are among the lucky few to still have a steady income with…

The benefits are undeniable

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Anyone who has latched onto the Financial Independence (FI) movement has probably discovered that a core tenet of scaling net worth is predicated on minimizing investment fees. The clearest and obvious way of doing so is to simply invest in an index fund that tracks either the total U.S. stock market, the total global stock market, or a large and representative subset, like the S&P 500. Maybe add a total bond market index fund to hedge volatility, particularly as you get closer to withdrawing from your portfolio.

Without going into too much detail into the benefits of index funds themselves…

Dessy John

Personal finance writer and digital marketer

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