My advice, distilled
30+ years of delivering financial advice in under 800 words
Good morning,
I’ve been writing about financial and retirement planning for a while now…
As I type this on the morning of May 30th, I’ve published 379 essays, all of which you can explore here. 👈
This doesn’t include the 200+ essays I’ve written, published, and since removed from my site for one reason or another over the years.
If we assume the average length of my currently published 379 essays is 500 words (it’s likely much higher than that) that’s a total of 189,500 words.
According to Google, a 300-page non-fiction book will have approximately 82,500 words.
So I’ve already shared 2+ books’ worth of words with y’all over the years.
I consider this growing collection of opinions, insights, and advice to be my personal “thought catalog.”
As I’ve shared before, I write as much for myself as I do for you.
And today, I want to distill much of my past writing down to a few key concepts and perspectives.
My hope is if you’re a newer reader, this will provide a nice overview of how I see things.
And if you’ve been reading for a while, thank you. Perhaps you’ll pick up a nugget or two below.
Let’s jump in:
Simplicity is important. Across all areas of your life. And especially when it comes to your money.
“Simplicity is the ultimate sophistication” – Leonardo da Vinci
Your financial future is the one that deserves the most attention
Put the oxygen mask on yourself before helping others
Help your kids. Help your parents. Help anyone that’s important to you. Just don’t jeopardize your own financial security in the process
There is still no free lunch. If it sounds to good to be true…
If you have money you expect to need/use within the next 5 years, it should be in a safe, liquid savings or money market account. And hopefully one paying MUCH higher rates than the typical bank.
The exception to this rule in when providing ongoing, supplemental retirement income from your portfolio
There are really just a few things you should focus on. And they’re the things within your control:
Cash flow - how much you save vs spend
Timing - when you retire or how often you travel, for example
Investment risk - how much short-term uncertainty you’re willing to endure in exchange for long-term comfort and confidence
Everything else is noise (and out of your control), so ignore it as best you can
“There are no solutions. There are only trade-offs.” - Thomas Sowell
Good financial decision making involves the evaluation of competing goals and making decisions that reflect what's most important to you
We each get one shot at making the most of our one and only life.
The trick is living like there’s no tomorrow while also planning and preparing for whatever may come.
And being ready to make necessary course corrections along the way.
While we need to consider what's rational, it's also important to explore what's possible.
Be sure to include some dreams and aspirations in your financial planning.
A financial plan IS NOT the same as ongoing financial planning
Make sure you’re including them in your financial planning. Especially your retirement income planning.
Active investment management = you're paying more in fees and taxes, plus you get additional uncertainty (underperformance risk) all in the “hope” of beating the market. I don’t see the appeal.
Diversification is about quality - not just quantity. I’ve seen portfolios with dozens upon dozens of mutual funds. And it still wasn’t diversified.
The foundation of effective financial planning - and living - is a clear understanding of what's important to you. This means getting specific about your values, goals, and priorities.
When it comes to your money, beware of friends, family and others with good intentions. They may truly want to help, but what worked for them might be problematic - or disastrous - for you.
Information is plentiful and has little value. Knowledge is less common and thus, worth more. Wisdom is rare and its worth immeasurable.
It’s very easy to mistake one for the other
Don't fall into the deferred life trap thinking you’ll really live it up once you’re retired or once you have “enough” in the bank. (see “making the most of your life above)
Of course, this isn’t a comprehensive list.
What did I miss?
Let me know…
And for more, continue reading along each week.
If you have a question about any of the above or would like me to dig deeper into any of the bullets, please let me know.
I take requests too 😉
Links & Things
Please read this Allan Roth article from January last year. While written primarily for financial advisors, I think his advice is well worth your time and I agree with him across the board. Let me know what you think…
Thoughts? Suggestions?
Hit reply or leave a comment and share your thoughts…
Until next Wednesday,
Russ
A great distillation of 189,500 words. Sterling work, Mr Thornton, very impressive!