The Origami Life isn’t a personal finance blog. We’re neither qualified (or interested) in telling people what to do. Tips and information on money are already well covered by sites like The Financial Diet and Mr. Money Mustache. Jennie and I are fans.
At the core, we’re just two imperfect human beings learning how to make conscious choices on how we’d like to live. While we know it can sometimes feel like the odds are stacked against you, it’s worth emphasizing that no one can give you permission to pursue the things you want in life.
We believe the best way to get to where you want to go is to:
Develop a familiarity (and openness) with the subject
Design a learning plan and goals to shore up your weaknesses
Execute on these goals with a series of actionable steps
Investing is no different from anything else. The biggest hurdle is taking the first leap from financial voyeurism to a proactive approach in managing your own money.
Just remember: beyond the confusing jargon, numbers, and rules, the ultimate goal is to develop a mindset and philosophy that will carry you through all the financial ups and downs of life.
Master The Basics
This is the equivalent of financial housekeeping. For a summary in my own words, you can read my piece on Seeking Alpha here.
Depending on your circumstances, the following action items will occupy a good 3-8 years of your life:
Contribute up to 401k employer match (if available)
Set short, medium, and long term financial goals
Track, budget, and automate your finances
Emergency fund (3 months worth of expenses)
Pay down all debt
Fuck-off fund (6 to 8 months worth of expenses)
Full contributions to Traditional or Roth IRA each year
Max out 401k contributions
Dollar cost averaging low cost index funds
Live your life
Learn How to Think vs. What to Do
Instead of blindly following a formula some random blogger tells you to follow, it’s more important to know why you’re doing something, all while constantly trying to avoid the complacency of thinking you’ll have anything “figured out.”
Because the only way you’ll be "done" is when you’re dead.
In this post, I’ve condensed all the investment advice I believe you will ever need in a lifetime. Without exception, this is a collection of insight and wisdom from people who’ve tested their ideas in the real world.
Now I’m going to throw out an arbitrary and condescending number: 99%. That’s the percentage of people I think who won’t follow through with this list.
But on the off-chance you do, I guarantee you will be leagues ahead of the tens of thousands of MBA grads being churned out of diploma mills every year. Even if you only absorb 25% of the information provided (as I did after the first go around), you'll emerge better equipped both intellectually and emotionally to deal with whatever life can throw at you.
Note on WOMEN Investors
I’m painfully aware of the preponderance of old white men in the list above. Chances are nobody has ever heard of people like Carol Loomis, Sheila Bair, Dawn Fitzpatrick, or Meryl Witmer. That’s because women still only represent 16% of investment professionals.
I’m not saying this to pander, but there’s evidence suggesting that women are temperamentally more suited to be successful investors than men. A huge part of investing is knowing what you don’t know and taking ego out of the equation. Does this sound like the typical adult male to you? It simply doesn’t make sense to me why financial know-how for women should be limited to the household, while investment decisions are often left to the men. Whoever ends up making the final decision, we think it's extremely important that both parties in a relationship are able to have an informed and rational debate on the future of your money. Not understanding the risks and rewards of major, make-or-break, life-defining investments like buying a first home is a serious handicap that needs to be addressed immediately.
Apply Your Philosophy to Every Aspect of Your Life
Finally, read widely to supplement your knowledge. I urge you to read fiction in place of anecdotal and mildly interesting books disguised as science. For example, I’ve learned more about life from W. Somerset Maugham’s The Moon and Sixpence and Raymond Chandler’s The Long Goodbye than anything Malcolm Gladwell has ever written (or will ever write).
Of course, none of this guarantees a life of wealth or happiness. It will however, make you a humbler and more rational thinker. Wealthy or poor, through life’s peaks and troughs, that’s something no one will ever be able to take away from you.