Your average person sucks at finances. I expect you to suck at finances too.

Salary

From a financial perspective, there is your floor and there is your ceiling. The most important thing you can do for your own stability is to raise your floor. This means getting the skills you need to get to a comfortable amount of money to live on at a bare minimum.

We found that the ideal income point is $95,000 for life evaluation and $60,000 to $75,000 for emotional well-being... this amount is for individuals and would likely be higher for families -- [Source]

In Canada and the United States, an income of $105,000 provides the most life satisfaction, while globally the ideal average income is $95,000.

If you're not there, figure out how you get there. That's your floor.

When you hit a good floor, figure out how to raise your ceiling. Here's what you don't do - don't raise your ceiling by trading more hours. That's stupid. You're not making more money. You're just investing more time. Figure out how to get your $/hr up.

Investing

Warren Buffet has 2 simple rules for investing. Don't forget the 2 rules.

  1. Never lose money.
  2. Never forget rule No. 1.

I'm a shitty investor. For the most part, I find it boring. People will tell you that if you invest $10,000 today, in 30 years, it'll be worth $60,000! What they don't tell you is the vast majority of gains happen on the tail end. Do you know how much that $10,000 is going to be in 10 years? $18,200. A whopping $8,200 over 10 years. If you can take that $10,000 and do something tangible that will result in $8,200 or more of actual or implicit value within 10 years (for example, raising your salary ceiling), it's a much better way to spend your money. Where's the fun in watching your money grow by 6% annualized year after year?

Did you think that last paragraph was good advice? If you did, you weren't paying attention. You forgot rule #2. Instead of $8,200 of virtually a sure thing, you decided to take on more risk betting that you could execute a strategy that'll get you higher returns. My retirement accounts comprise about 50% of my cash value. These retirement accounts are all broad market ETFs since I have a 30+ year time frame. I set it, put my 401k contributions in, and forget it. You put in $15,000 a year and let it grow for 30 years, and you're looking at $1.2M. Can't afford $15,000 a year to add to a 401k? Go back to the salary section.

Gambling

Not literal gambling, but rather higher risk investment options. The type of investments that can potentially lose you some or all of your money.

The first rule of gambling is:

  1. Never invest gamble money that you can't afford to lose.

No payout will ever be worth losing what you can't afford to lose. And if you're going to gamble, you're better off assuming you're going to lose it all - but hopefully the experience you gain from losing it will be worth the cost.

That said -- if you're going to gamble with money you can afford to lose, my advice is Roth IRA Options Trading. Highly leveraged tax free earnings. You'll probably lose it all, but at least it's fun!

Debt

The simple rule of thumb here is don't carry debt. If you have to ask whether, the answer is "No".

The smarter way to handle debt is that it's a tool to be used. Can you get more value out of the debt than the cost? For example, we're moving soon and buying a new house. Generally, people suggest a 20% down payment.

I look at that and it's just not smart. Current interest rates are at 3%, markets have had a 30-40% pullback, and I see absolutely no reason why I would want to part with more cash. Instead, I take the 5% down payment, some tiny amount of PMI due to my credit score, and keep an extra $50,000 cash on hand to invest in stocks.

It's the same reason I have car payments. Could I pay off the car completely? Sure, but why would I want to?

The bottom line is this, if you're going to take on debt, don't ever be in a position where you can't pay off everything within 1 month if you need to. As a grown ass adult, your job is to figure out how to use debt to make you more money. Don't be in a position where your debt can be used to enslave you.

FIRE

FIRE is bullshit. Get to a point in your life and career where you can have a "fuck you" mindset regarding money because you know your market worth and can execute on that even in a massive pandemic and recession.