Why does the world want index investors?

I have no financial training or credentials. This article represents my understanding from synthesizing many sources of information, but I am likely misusing terminology, and I may be factually incorrect on some points. Apply this information at your own risk.

Don’t invest in anything you don’t understand.

This is the first rule of investing. In a world where people want your money, it’s a good way to avoid becoming mark, swindled out of your life savings. In other words, it’s important to understand:

What your money will be used for
Where the new money to pay your return-on-investment will come from
What the risks are

If investing for building personal wealth has a second commandment, it is to continually pump excess income into low-cost index funds that track a large chunk of the US stock market. It’s not the purpose of this piece to justify this, but mountains of research indicates that this almost absurdly simple strategy—when executed with discipline and an iron stomach—has historically outperformed pretty much every complex investment strategy implemented by active traders, especially once fees are accounted for ¹.

I have found these two pieces of advice to be in conflict. This piece is my attempt to sort this out.

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The kindest things anyone has ever done for me

Recently, I’ve gotten into a podcast called Invest Like The Best. The host ends every episode by asking his guest “what’s the kindest thing anyone’s ever done for you?” To be honest, this didn’t stick out to me until I heard a couple guests answer with some pretty trivial shit. I won’t say which guests, but imagine it’s something like “someone lent me $100 the other day”. And, I must admit, I felt pretty judgy. Like, how privileged must your life be to have something so trivial be the kindest thing anyone’s ever done for you?

To be fair, maybe they were just put on the spot and didn’t have time to think deeply about it. And really, I don’t really know their life, so whatever it was they actually said really made a difference.

Anyway, it got me thinking: what would I say? I’ve got two answers.

Trigger warning: severe depression is discussed.

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Notion: my new life management tool

Two weeks ago, I made the momentous decision to attempt to import my Evernote history into Notion (my referral link here, if you’re inclined). I thought I’d dip a toe into a different tool for information management.

I haven’t looked back.

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10 Years Later: My Baltimore City Teaching Adventures

As a part of the redesign of this site, I merged in the journal of my brief teaching career, which was originally a separate website. It’s my most significant writing project to date. Here it is, prefaced by a retrospective I just wrote:

A Former Teacher’s Story

Book review: The Index Card

TL;DR: If you are starting from zero background and want to work on your personal finance situation, The Index Card is a fantastic place to start.

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Mission accomplished (Our financial planning voyage — Part 3)

As has happened before in this process, after making a bunch of progress, I dropped the ball for a couple months. I don’t recommend doing that. It’s tough getting the momentum back. But if you’re like me and you’re allergic to just finishing things, all you can do is pick yourself up and gin up the motivation to get things moving forward again.

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Property taxes, who knew?

Going into buying a home, I had to wrap my head around a lot of things. There was finding the home itself, then the whole process of negotiating the offer, the mortgage, and then all the thoughts of what you want to do when you actually move in. A big part of the financial aspect of the purchase and mortgage is projecting your monthly payments. Property taxes are a significant part of this.

The thing is, even once you pay your mortgage down, you’ll still be paying those property taxes in perpetuity. In a state with high property taxes like New Jersey, it’s a sizable percentage of what you might pay in rent some other places. I was aware of property taxes. I assumed they’d be predictable and logical. Boy was I wrong.

Disclaimer: Per usual, I have to make clear that I am (obviously) not an expert on this topic. This piece reflects my growth from zero understanding, and hopefully underscores that you should get professional advice as you make your own financial decisions. Comments and corrections are very welcome!

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The List (Our financial planning voyage — Part 2)

I’ve made a ton of progress since the last check in. All of the work of piecing together our complete financial picture and researching the fundamentals of financial planning culminated in one long checklist of todos to actually begin to build out our plan. What follows is a version of our punchlist.

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Financial plan update

So here’s where I tell you that I’ve already piloted our financial plan to it’s final state, but just forgot to write about it.

Just kidding.

In reality, shortly after I wrote the last post, I ran out of steam. I haven’t read my books yet, and I just this week started picking up where I left off, very much still in the exploratory part of the process. That said, I still think I’ve learned some good stuff.

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Our financial planning voyage — Part 1

Much like my mortgage shopping voyage, I’m starting from scratch-ish trying to make a financial plan, and I’m hoping to share what I learn in the process, and hopefully other folks can use this as a shortcut to the jump-off point for their own exploration. To begin with, I think my family is in pretty decent financial shape, so this voyage won’t be relatable to everyone. Probably young families blessed with good income. But if you’re in a similar boat, I hope this helps you out.

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