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. …

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…

Tax savings matter, but choices matter more.

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I recently had my second child. As someone who has always considered himself financially prudent, forward-looking, and disciplined, I opened a college savings account (529 plan) for her the day her Social Security number arrived in the mail. I had saved enough cash earlier in the year to fund this account to the maximum $15k amount before incurring the gift tax. I’ve always liked the benefits of a 529 account, and also believe that many investors are not aware of just how flexible this type of account actually is.

At this stage, the combined amount I have saved in these…

Create an asymmetrical risk vs reward system

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Cryptocurrencies have become one of the hottest, most interesting, and most misunderstood topics in personal finance. Many in this community have been immersed in the space for years, are bitcoin maximalists, conduct extensive research in altcoins, and may even hold upwards of 50% of their assets in digital currencies. I can confirm that I fit none of those profiles, but can also accept that the momentum and network effects of adopting digital currencies are far too great to ignore.

As more of a traditional investor in stocks, bonds, and real estate, I have only recently begun investing in crypto. I…

Switching focus from income to wealth

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In the early years of our careers, my wife and I had a sole focus in our financial lives to increase our incomes as quickly as possible, with minimal regard to what we were actually doing with the money we earned and saved. Once we built up a sizable sum, we figured we needed to park that money somewhere other than a checking account.

We had ZERO knowledge of investing at this time and were very likely conditioned by the financial media to believe we couldn’t possibly manage investments on our own. …

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…

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…

Dessy John

Personal finance writer and digital marketer

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