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Finances

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Talking about money has always felt foreign to me. It’s one of those things that’s socialized to be taboo. If you’re doing poorly, people may not like you. If you’re doing well, people may not like you. So, just don’t talk about it. At least that appears to be the American ethos when it comes to money.

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.

Values

Section titled Values
  1. Autonomy: When I do the Motivators exercise on myself, the ability to “choose my own adventure” ranks second; every time.
  2. My values and principles over social norms and mores.
  3. Intellectual legacy over
    • financial legacy over
    • genetic legacy.
  4. The most constrained over the most funded.
  5. United States over International.
  6. Index funds over managed funds.
  7. Index funds over individual stocks and bonds.
  8. Small, local businesses over
    • large, miltinational businesses over
    • local governments over
    • state governments over
    • federal governments.
  9. Cooperative business structures over
    • privately held over
    • publicly traded.
  10. Equities (ownership) over bonds (lending).

Principles

Section titled Principles
  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 vehicle don’t need to compound in that vehicle.
  4. If you want to go fast, go alone. If you want to go far, go together.
  5. Rising tides lift all boats and don’t get caught skinny dipping during receding tides.
  6. Money is food, not blood.
  7. Be in the market and don’t try to beat the market.

Practices

Section titled Practices
  1. Maximize revenue, minimize spending.
  2. Combined expense ratio less than 1%.
  3. Maximize the number of people supporting your progress.
  4. Think win-win and meeting in the middle.
  5. Pay yourself first.
  6. Promote dividends earned in vehicles returning less than 7% per year to vehicles that historically return higher.
  7. Higher rates of return should be lowest piriority consideration when making decisions (see previous).
  8. Building Wealth Paycheck to Paycheck.

Tools

Section titled Tools
  1. 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.
  2. Wave for personal and business account transaction aggregation and budgeting.
  3. Stripe and Square for payment processing, appointments, and the like.
  4. One insured spending account: All non-business outflows come from this account.
  5. One or more federally insured, interest bearing savings accounts.
  6. One or more regulated retirement accounts.
  7. One or more regulated taxable accounts.
  8. A well-maintained investment policy.
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