Fountain of Prosperity : Personal Finance and Investing for Longevity

I get questions from people often about personal finance, early retirement and financial independence.  This is my answer in its most distilled form. Enjoy!


The original Windsor Castle was build in 16 years and was constructed entirely of timber.  Timber is easily destroyed and burnt.  Henry the 2nd upgraded the castle to stone and that took 60 years.  View your finances as a castle and your job is to fortify it and change from timber to stone.  It will take a long time and effort but when your finished, your legacy will stand for generations just as Windsor Castle has.  It isn't always about yourself, it's about those who come after.  It isn't always about yourself, it's about those who come after.  I want to send people to school, build wells, feed the hungry and provide those less fortunate with opportunity.


Simplicity Is King
As with many things in life, the simplest answer is often the best answer.  When it comes to finances this is especially true.  Finance, in my humble opinion, can be split into three categories :
  1. Personal
  2. Investing
  3. Mind
While these following lists will seem simplistic, they follow the inch wide - mile deep philosophy.  Each one of these items don't need to be but can be delved into, forever.

Personal
  1. Establish a Budget.
    1. I can always help with this, it's very simple when you break it down.
  2. Establish 1 months of expenses for emergencies.
  3. Pay down debt.
  4. Establish 3 to 6 months of expenses for emergencies.
  5. Think of any large purchases you may want to make in less than five years.
    1. House
    2. Car
    3. Etc
  6. Put enough money away where you can sleep well, knowing whatever happens you can continue to live the life you need.
Investing (Done after the Above)
  1. Utilize 401k Match if Available.
    1. Invest in the cheapest and globally diversified portfolio you can.  This will most likely be some sort of Target Retirement Fund.
  2. Open Roth IRA through Vanguard
    1. Buy a Cheap Passive Globally Weighted Equity Index Fund.  My preference is VTWAX from Vanguard.
  3. Contribute Max to Roth IRA
    1. This will be difficult for many.
  4. Contribute Max to 401k
    1. This will be impossible for many.
  5. Open Brokerage/Taxable Account
    1. Buy a Cheap Passive Globally Weighted Equity Index Fund.  My preference is VTWAX from Vanguard.
  6. Contribute what you can every paycheck.
  7. Never Sell and Stay the Course.
Mind
  1. Delay Gratification
  2. Maintain a Stoic Mind
  3. Don't compare yourself to others
Closing Remarks
Repeat Until Wealthy.

 

Comments

Post a Comment

Popular posts from this blog

Your Body's 401k

Image
  Your Body's 401k By Adam Mundorf People think you're crazy when you wake up and change your life. Your Body's 401k The obsession with money is misguided.  You don't need nearly as much as you think you do and if you have crazy aspirations for your money like mansions, Lamborghini and expensive tastes, your health will need to take a backseat in most cases.  Many readers of this blog know that I know a lot about the foundations of personal finance and investing.  What my many hours and possibly years of reading has led me to, is that health is wealth.  All that stressing, sitting and lack of true intrinsic fulfillment leads to a quite frankly, sad end of life.  People act like nursing homes, limping around, fat body and skinny arms is the only way to end up.  This couldn't be further from the truth.  I can run out of fingers and toes, thinking of examples of millionaires I personally know, who said they wished they took care of their health.  They have nice stuff b
Read more

What I Learned from 29 to 30

Image
What I learned from 29 to 30 By Adam Mundorf What I Learned from 29 to 30 Hm, welp another year has passed and my life couldn't be better.  I am in good health, money in the bank and a roof over my head.  The above things are due to my decisions and actions.  Not once have I worried about an invading nation, a famine, a drought or where my next meal was coming from.  The above things have to do with luck.  The biggest lesson I learned was that our problems aren't really problems at all.  Growing up and living in America is living life on easy mode provided you don't self harm yourself through bad decisions.  We obviously don't all grow up with the same opportunities provided to us BUT if we take responsibility for our actions, realize we start where we are, we can become anything we want. Things aren't perfect but America is pretty darn close.  There is a reason why there are endless lines of people trying to get in but so few are trying to leave. To sum it up 29 to
Read more

Why Do You Want to Be Like Them? : The Realization I'm Not Conventionally Smart - Crying in the Car

Image
  Why Do You Want to Be Like Them? The Realization I'm Not Conventionally Smart - Crying in the Car By Adam Mundorf Why Do You Want to Be Like Them? This blog will be mostly my inner monologue with some questions along the way, just for a warning.  I'm putting my thoughts down and through that process to find some 'a-ha' moments.  It's self exploration. I get asked often about why I'm comfortable where I am in life because my chosen profession isn't what most people would want.  I'm not an exactly ambitious individual but am content with my own lot in life.  People respond typically with an almost pity and that perplexes me.  Maybe it's because I have such simple wants and desires.  I value the inexpensive/simple pleasures in life.  I value peace and quiet, a comfortable bed, cute animals and running water.  I for sure get if you burdened your life with obligations i.e, family, huge debts and/or some idealistic dream of being fabulously wealthy, you&
Read more