I want to share with you all how I choose to invest. In order to do that, we first need to get back to basics.
Today I want to start with the accounts that I use.
Your investment accounts are basically the buckets in which you hold your investments.
This sounds like it should be simple. You open an investment account in the same way that you open a bank account. You put money into it and then you buy your investments.
It’s not quite that easy, however.
The government gives all sorts of different tax benefits to different people for different things. In order to get those tax benefits, you need to keep your investments in specific types of buckets. This means that you can end up with multiple buckets that you open yourself and multiple buckets that are opened by your employers.
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.
I apologize in advance for the inherent humblebraginess of vacation pictures. I did warn you, though.
I am generally a pretty frugal person. Three of my lastfour posts have been about saving money. I’ve written about cognitive biases that get in the way of saving money. I’ve written about the best way to hit savings goals.
And yet, I just spent a whole bunch of money on a three-week vacation to South Africa and Spain. This came thirteen months after a trip to Peru. Which itself came eight months after a honeymoon in the Bahamas (which, to be fair, was paid for with hotel points).
This may seem out of character or incongruent with my savings focus. But I don’t save money for the sake of saving money. I don’t intend to be the richest man in the cemetery. And while I would love to reach financial independence, I am not aiming to get there as soon as possible by any means necessary. Instead, I want to live my best (and happiest) life with as little waste as possible. Continue reading “How to Buy Happiness”
This is a great start, but it doesn’t mean anything if you don’t actually put that money away. Instead, our natural tendency towards mental accounting may be eating into, or completely negating, our savings.