Finances

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.

1. The most constrained over the most funded.
2. United States over International.
3. Passive management over
   • passive investing over
   • active investing over
   • active management.
4. Index funds over
   • individual stocks over
   • bonds.
5. Equities (ownership) over bonds (lending).
6. Small, local businesses over
   • large, multinational businesses over
   • local governments over
   • state governments over
   • federal governments.
7. Cooperative business structures over
   • privately held over
   • publicly traded.
8. Time in the market over timing the market.
9. Being in the market over beating the market.

1. Corporate profits favor owners; owning equity shares makes you an owner of the company.
2. The borrower is slave to the lender; owning bonds makes you the lender to the government or corporation.
3. Dividends created in a security don’t need to compound in that security.
4. Rising tides lift all boats and don’t get caught skinny dipping when they recede.
5. Money is food, not blood.
6. The macro-allocation principle.
7. Most individual stocks will drop from their all time high and not return to that high; many will go to 0.
8. The value of the total stock market tends to rise steadily over time.

1. Maximize revenue, minimize spending, save and invest the gap.
2. Pay yourself first.
3. Promote dividends earned in securities returning less than seven percent per year to securities that historically return higher.
4. Chasing returns should not be the basis of any decision (see previous).
5. Building Wealth Paycheck to Paycheck.
6. Personal budget.
7. Follow the investment policy.
8. No leveraged investing.
9. No shorting stocks.

1. Wave for personal and business bookkeeping.
2. Stripe and Square for payment processing, appointments, and the like.
3. Portfolio Visualizer for backtesting portfolios and other research on individual investment securities; though there is a wide range of tools available.
4. Portfolio Charts for the known portfolios and macro-allocation tools.
5. 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.
6. Fear and Greed Index by CNN.
7. One insured spending account: All non-business outflows come from this account.
8. One or more federally insured, interest bearing savings accounts.
9. One or more regulated retirement accounts.
10. One or more regulated taxable accounts.
11. A well-maintained investment policy.