I’m not financially ambitious and haven’t had a record of earning money; however, I’m pretty good at allocating money when I have it.
I focus a lot on character and culture; values, principles, practices, and tools. This page describes my financial character, which is part of the broader personal character.
ValuesSection titled Values
- The most constrained over the most funded.
- United States over International.
- Passive management over
- passive investing over
- active investing over
- active management.
- Index funds over
- individual stocks over
- Equities (ownership) over bonds (lending).
- Small, local businesses over
- large, multinational businesses over
- local governments over
- state governments over
- federal governments.
- Cooperative business structures over
- privately held over
- publicly traded.
- Time in the market over timing the market.
- Being in the market over beating the market.
PrinciplesSection titled Principles
- Corporate profits favor owners; owning equity shares makes you an owner of the company.
- The borrower is slave to the lender; owning bonds makes you the lender to the government or corporation.
- Dividends created in a security don’t need to compound in that security.
- Rising tides lift all boats and don’t get caught skinny dipping when they recede.
- Money is food, not blood.
- The macro-allocation principle.
- Most individual stocks will drop from their all time high and not return to that high; many will go to 0.
- The value of the total stock market tends to rise steadily over time.
PracticesSection titled Practices
- Maximize revenue, minimize spending, save and invest the gap.
- Pay yourself first.
- Promote dividends earned in securities returning less than seven percent per year to securities that historically return higher.
- Chasing returns should not be the basis of any decision (see previous).
- Building Wealth Paycheck to Paycheck.
- Personal budget.
- Follow the investment policy.
- No leveraged investing.
- No shorting stocks.
ToolsSection titled Tools
- Wave for personal and business bookkeeping.
- Stripe and Square for payment processing, appointments, and the like.
- Portfolio Visualizer for backtesting portfolios and other research on individual investment securities; though there is a wide range of tools available.
- Portfolio Charts for the known portfolios and macro-allocation tools.
- MorningStar Portfolio Tools for looking at weights.
- Search for a fund in the top navigation.
- Choose “portfolio” on the fund-level navigation.
- Choose “weight” on stock style.
- Fear and Greed Index by CNN.
- One insured spending account: All non-business outflows come from this account.
- One or more federally insured, interest bearing savings accounts.
- One or more regulated retirement accounts.
- One or more regulated taxable accounts.
- A well-maintained investment policy.