Historically, I haven't been good at earning money; however, I've always been decent enough at knowing what to do with it when I have it. I worked at a credit union for six years and was trained on multiple topics there. I worked in the call center and was introduced to all sorts of individual strategies. As a coach I often recommend reducing friction to decision making. I have found establishing values, principles, practices, and tools early helps tremendously in automating decision making. These values, principles, practices, and tools don't need to be limited to the topic area; there's room for overlap.
The following sections begin with my personal values, principles, practices, and tools with additional elements that I may not incorporate into my personal set but still think are viable. If you think any are missing, please let me know.
- Autonomy: When I do the Motivators exercise on myself, the ability to "choose my own adventure" ranks second; every time.
- Index funds over managed funds; index or mutual funds over individual stocks and bonds.
- My values and principles over social norms and mores.
- Intellectual legacy over financial legacy over genetic legacy.
- Businesses over governments, state governments over federal governments.
- Cooperative business structures over privately held over publicly traded.
- The most constrained over the most funded.
- United States over International: 70 to 30 percent plus or minus 30.
- Corporations over governments.
- Equities (ownership) over bonds (lending): 70 to 30 percent plus or minus 5.
- Local governments over federal governments: 70 to 30 percent plus or minus 30.
- 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 vehicle don't need to compound in that vehicle.
- If you want to go fast, go alone. If you want to go far, go together.
- Rising tides lift all boats and don't get caught skinny dipping during receding tides.
- Money is food, not blood.
- Be in the market and don't try to beat the market.
- Maximize revenue, minimize spending.
- Combined expense ratio less than 1%.
- Dividend promotion.
- Maximize the number of people directly and indirectly supporting your progress.
- Always think in terms of meeting in the middle.
- Pay yourself first.
- Promote dividends earned in vehicles returning less than 7% per year to vehicles that historically return higher.
- Decisions should consider everything else before trying to generate higher than average rates of return. (See principle 7.)
- Building Wealth Paycheck to Paycheck.
A note on number 7, I have a savings account at a credit union that earns roughly 6% on the first $500 when you meet certain criteria and 0.15% for each dollar above the first $500. I would like all the dividends to be promoted to index funds. Further, I plan on using my bond funds as simple interest savings accounts where I deposit an initial amount and have the dividends not reinvest. More on this in my investment policy.
- Personal Capital for tracking the majority of my portfolio; some vendors aren't accessible to them at the moment, but it gets me close enough. In particular I appreciate the "You Index" and "Asset Allocation" tools.
- Wave for personal and business account transaction aggregation and budgeting.
- Stripe and Square for payment processing, appointments, and the like.
- 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.