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Money Principles

Optimize for doing work I love, things money can't buy, and sleeping well at night

When I didn't have any money, my early twenties, I didn't really think too much about it.

When I was in debt, my late twenties, I worried about it.

Now that I'm recently out of debt, early thirties, I'm trying to learn how to be better with it and learn from my mistakes.

Money is about tradeoffs. If I make it about earning more, what do I give up? If I make it about spending less, what do I lose out on? What's the balance between saving and investing, liquid versus locked away in retirement accounts?

To answer these questions, I've been thinking about money principles.

Money Goals

Financial peace of mind - I don't want money to be a source of anxiety and stress, like it was when I was in debt. I want to be able to provide for my family and endure the down times of the economic cycle with minimal worry.

Freedom - I want to be able to do work that interests me, work that I enjoy. I don't want to be in a situation where I have to take a job just because it pays more. It's about having options.

Autonomy - Honestly, I want to be able to surf when the waves are good, train for endurance races, and spend time with my family. I want more perfect days.

Experiences - A lot of experiences aren't expensive, like spending 4 days on the JMT. But some are. Ironman, snowboarding, a family trip to Hawaii, and living by the beach are pretty expensive.

Earning

Optimize for doing work I love. It's easy to do great work when I love what I do. Work hard and smart. Money will follow great work. It would be a disaster to make a career decision optimized for money and then totally regret it.

Money is not the only currency. There is priceless value in having more time and mobility, freedom and autonomy, enjoying who I work with. That makes it impossible to add up what I'm really gaining from a job, and pointless to compare myself to the incomes of peers.

Balance income volatility with stability. Focus on what I can control. I control the inputs more than the outputs. I can't predict but I can prepare. Keep my monthly needs low and have an emergency fund.

Have a diversified income stream. It can be a financial stabilizer, a learning opportunity, or be fun. It keeps my career interesting.

Take entrepreneurial risks, but be patient with the next opportunity, don't force it. Business ideas are noticed, they happen when luck meets a prepared mind. In the meantime, continue to stir the pot, pursue my curiosities and work on things that genuinely interest me.

Spending

Optimize for things money can't buy. Money can't buy health and fitness, loving relationships, meaningful work, integrity and a good attitude. Money shouldn't come at the expense of these things.

Aspire for a simple life. Learn to contently live with less. Upgrade my lifestyle sustainably. Practice frugality. Avoid playing status or compare games.

Spend far less than I earn. Take a stance, spend guilt-free on things I love, cut mercilessly on things I don't. Avoid impulse spending, everything is 100% off if I don't buy it.

Vote with my dollars. Don't be wasteful. Buy high quality and for the long-term. Buy secondhand when possible. Every dollar I spend (or don't spend) is voting for the kind of world I want, the kind of person I am.

Support friends and family when they need it. Donate to causes that compel me. My family's future is my number one charity.

Run the numbers monthly. Being financially healthy means understanding my historical income and spending, establishing clear financial goals, and ensuring my current behaviors support my financial plans.

Saving and Investing

Optimize for sleeping at night. Need far less than I earn. Have a 6 months cash runway. Automate my investments to dollar-cost average in index funds.

Wealth is the money that I don't spend. Money can be used to buy things or acquire assets. Prioritize reinvesting money into wealth creation instead of lifestyle inflation.

Save for retirement. The whole point of compound interest is that it needs decades to work effectively. Give up a little today to have more tomorrow.

Don't day trade. Don't gamble either. Buy and hold, play the long game. I get one long-term, invest it wisely.

My investment checklist - Take care of the short-term, then the long-term, then the mid-term. First, have 6 months minimum in cash runway. Second, max out HSA and Roth IRA. Then, split the rest between a taxable brokerage account and saving for big purchases or serendipitous opportunities.

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