Financial Fitne$$

A collection of financial tips and wisdom

Disclamers

• I'm not a professional financial planner or adviser
• Generalized advice (may not apply to everyone)
• I have not implemented everything
• Do your own due diligence (Then tell me your findings :)
• Always use a fee-based fiduciary (be critical of free advice, including this)

Why

• Why this talk
• Pending Recession (Debt Cycle)

Everyone has a plan until they get punched in the mouth - Mike Tyson

Money

• Median Income
• Inflation (Tax on savers)
• Difference between assets and liabilities
• Good vs Bad debt. (good debt is associated with assets)
• Where does money come from? How it is made?
• Warren Buffet Rule
• Velocity Banking, BYOB/IBC, Fire Movement
• Credit Card Interest (6,500 debit = 70k savings)
• Simple budgeting techniques (debit cards)
• Know your net worth
• Monitor everything
• Real Cost of Coffee (Income tax, sales tax, opportunity cost)

More Money

• If you want to spend less, pay with cash
• Self Mortgage (Auto Pay Yourself)
• Teach your kids (Nobody else will)
  • 10, 10, 10, Fun Envelopes
    • Giving, Long Term, Short Term, Fun Money

Credit

• 30% credit utilization
• Never close a card, spend a little every year.
• Every year ask for more credit and lower interest
• Credit Freezes (Not Locks): Free and easy DIY
• CreditKarma
• Due Date / Recording Date
• 2 months of zero balance on due date
• 90 days of balances matter
• Disposable credit card numbers
• Avoid Co-Signing (Even with your spouse) (lawsuits)
• Hard Pulls when shopping (14 days)
• Hold Cards with different institutions

Taxes

• Single biggest life expense
• Governments incentivize certain behavior with the tax code
• Kids can make 12k tax free 

Home Buying

• Look at > 10 houses before buying (preferably more) Fight Fatigue
• Get your own title company
• Do the numbers if it would make sense as a rental
• Primary homes with mortgages can become a rentals in 1-2 years 
• Locks you into the economy
• In the US you don't own property, you rent it from the Gov.
• Homestead Laws & Lawsuit risk (OR 4-50k WA 125k)

Mortgages

• Death Pledge
• 10 Loans (per person)
• 3 mortgage quotes
• Inflations effect on debt
• Escrow costs money (Also causes you to pay attention to costs associated with taxes and insurance)
• No limit to mortgage deductions on investment properties
• Loan modifications
• Mortgages are a hedge against the dollar (Shorting) 
• Debt Cliff
• 30 year fixed mortgages are rare in the world
• recoverable non-recoverable << wrong term

Insurance

• Use high deductibles (Self Insure, rating, credit)
• Umbrella Coverage is cheap (Why?) (outside of a Home & Car: liable tweets, negative reviews, photo tagging, recording video/audio, dog bites, skiing accidents)
• Do not disclose your umbrella (1-5 mil)
• Insurance companies sometimes help the other side
• Save when paying once a year and autopay

Insurance (Continued)

• You can be liable
• Landlord policies do not cover you
• Landlords can tap your policy

Renter's insurance

Insurance (Continued)

• Wealth building
• Diversification
• Protection from creditors
• Fund your own loans (Emergency Fund)
• Seasoned
• Tax free withdraws for life

Whole Life / IBC

Investing

• Down markets means cheap buys
• Dollar Cost Averaging
• Consider down sides first (Can you withstand a 40% correction, two times?)
• Pay attention to fee ratios of funds
• Bid/Ask Spread and Market Makers
• Bulls & Bears
• Gambler's Ruin (10>11, 20>25, 50>100 )

Investing (Continued)

• Limit Orders are fake stop losses
• Married Puts as insurance (How some Annuities work)
• All Weather Portfolio / Rebalancing
• -2.5% inflation -2.5% opportunity costs
• Roth might be better than college savings plans

401(k) & Fidelity

• 401(k) a.k.a Salary Reduction Plan
• Median 55-65 has 60k
• Taxed at Ordinary Income with capital gains risk
• Lock Accounts
• Quick and easy direct institutional transfers (Keeps assets)
• Auto Rebalancing (Once a year)

401(k) & Fidelity

• Increase saving with every raise
• Protected from creditors
• IRA / Roths can invest in any traded asset
• Company Match 80-120% ROI

401(k) Loan

• 50% up to 50k of balance
• 60 month term $955 payment @5.5%
• 85 month term $719 payment @5.5%
• Counts a seasoned funds
• Not on credit report
• Pay up when you leave the company
• Avoid PMI on a mortgage
• Tax hit
• Once per 12 month period

Action Items

• $1000 Emergency Fund (Or mortgage / rent)
• $2500 Self Insurance Fund
• Set deductibles to $2500
• Create debit card sending funds (Food, Clothing, Fund Money, with Auto Pay)
• Bring credit cards under 30% (boosts credit)
• Pay of bad debt
  • Use a modified snowball payoff strategy
  • Government Loans first

Action Items (continued)

• Determine monthly expenses
• Build Emergency Fund (3 months expenses)
• Payoff Credit Cards Each month
• Live on 80% or less 
• Long Term Savings (Investment Savings with Auto Pay)
• Increase 401(k) for full match
• Refinance to lower payment (Cash out??)

Inspirations & Credits

• Dave Ramsey / Susie Orman (great for starting out financially)
• Clark Howard (Consumer awareness)
• Mark Kohler (Legal and Tax advice)
• Ray Dalio (Investing philosophy)

Topics

• Money
• Credit
• Taxes
• Home Buying
• Mortgages
• Investing
• Retirement & Fidelity