Over the last couple weeks I’ve run through a lot of my philosophy behind saving and investing. I discussed that I invest at least as much as I spend every month because I want to buy options for my life, because I see the value of labor declining over time, and because I don’t want to need to start a new career path if mine gets automated out of existence.
I save and invest a lot. I track my spending and investing and have a goal of investing (between retirement accounts, health savings accounts, and taxable accounts) more each month than I spend. I have successfully hit this goal every month for the last three and a half years.
I recognize that this is unusual.
I have spent a good deal of time preparing taxes for folks in a pretty well-off area, and I am aware that most people don’t save like this. It is especially unusual for young people. Continue reading “Why I Save So Much”
I spend a good deal of time preparing taxes this time of year.
My own, sure, but also lots of other people’s. I prepare taxes as a side hustle.
As far as side hustles go, it’s pretty good. The money is solid for a side gig. I can work as much or as little as I want. I get to work with numbers, which is something that I miss in my current day job.
And yes, I recognize that that last line may not be a selling point for most people.
I have learned a lot through this job, but there is one lesson in particular that I want to talk about today.
You may be familiar with the term “burying your head in the sand.”
The image comes from the myth that ostriches avoid danger by sticking their heads in the sand and pretending it doesn’t exist.
When we are accused of burying our heads in the sand, it means that we are ignoring bad things in the hopes that they will go away. This is usually not a useful strategy. Continue reading “The Ostrich Effect”
When faced with a tough decision, most people choose to do nothing.
This is the basis of the Status Quo Bias, first proven in a series of experiments in 1988 out of Harvard. The general idea is that people are emotionally attached to the current state of affairs and are skeptical of any change from that baseline.
What if I told you that you have access to an investment account that is better than a 401k or an IRA? An account with tax free contributions, tax free growth, and tax free withdrawals for qualified expenses. You even avoid paying Social Security and Medicare taxes if you contribute directly from your paycheck. (That’s more than you can say for any other account).