I was chatting with someone at a meetup here in Salt Lake City about finance and the subject of age came up. They were young – still in college and already way ahead of where I was at that time. Looking at the numbers from the Interactive Guide, they’re not alone! The group in the “college millennial” age has the potential to be the easiest retirees ever – if they can start young, control spending and save aggressively.
That got me wondering:
What do I wish I had known at each age?
That’s the goal of this post – sharing what I wish I had known. Although these have ages associated with them here, it’s more for ordering purposes. If you understand one thing on the list, just move onto the next one – even if it’s beyond your years.
This is also completely opinionated based on my knowledge of investing. I strongly prefer and advocate diversified, low-fee, index fund investing, which this focuses on. If you already know up to your current age, don’t stop there! Keep learning other topics. In other words, don’t wait to learn!
This list is limited by my own knowledge of topics in the investing world. I started investing when I was 24 (I’m 36 now) and have made plenty of mistakes. I’ve been reading about financial independence and optimizing it since reading The Bogleheads Guide to Investing in 2010 and finding Mr. Money Mustache in 2012. In that time, the community has grown from a small corner of the internet to a worldwide phenomenon!
But, for someone starting today, there’s almost a decade of blog posts. Outside the web, there’s even more books and other studies on the topic. This list is my attempt to hit on the main topics as it relates to the how of getting to financial independence.
With that in mind, here are 44 things you should consider looking into if you want to be financially independent or retire early.
- How to save up for something over time.
- How long it would take to pay off your student loans.
- How to create a budget, and what to account for in it.
- Living within your budget.
- How to live off a debit card for purchases and live within your means.
- How credit card interest works.
- How to pay off a credit card each month.
- Calculate when you could be financially independent
- If kids are something you want as part of your life experience.
- Learn how to invest up to the company match in your 401k.
- Using target-date retirement funds to invest.
- The magic of compound interest.
- What the impact of lifestyle inflation and hedonic adaptation are on your long-term goals.
- What diversification is and how it helps your portfolio.
- Read Your Money Or Your Life and The Millionaire Next Door.
- How incorporating a side hustle could allow you to retire 10 years earlier.
- Switching from a target-date fund to a 3-fund portfolio asset allocation.
- How to rebalance a portfolio to stay in line with your asset allocation.
- What the 4% rule, the Trinity Study, and the Bengen Rule are.
- How to invest a sudden bonus/windfall
- How to invest in a Roth IRA or an IRA.
- Read The Bogleheads Guide to Investing.
- How to track your investments.
- Using a health saving account to further lower your taxes.
- What you would do with $1 million.
- Revisit your yearly spending to understand if, or how, it’s grown.
- What dollar cost averaging is
- How to invest while (potentially) in a bubble.
- Using a mega backdoor Roth contribution if your company allows it.
- Tax-efficient fund placement for your investments across different accounts.
- How to invest using a brokerage (post-tax / after-tax) account.
- What the different tax brackets are, and how they impact your taxes.
- How to rebalance all of your accounts to stay tax-efficient.
- How to use tax-loss harvesting in your brokerage account to reduce your taxes.
- What a Backdoor Roth IRA conversion is and how to do it.
- How to give money using a donor-advised fund.
- How to reduce your taxes by investing in real estate.
- How to calculate how much you’ll earn from social security (if it still exists)
- The process to access retirement accounts funds early (before age 59.5)
- How to pay 0% taxes on your long-term capital gains.
- Protect your assets by understanding sequence of returns risk.
- Various strategies for deducting business expenses and reducing business taxes.
- How to protect your assets using liability insurance and life insurance.
- Retiring doesn’t mean you have to stop working.
- Create your own list of 101 things you want to know, have, do, or be.
There are a number of things that are intentionally not on this list:
- How to time the market.
- How to pick individual stocks.
- What options are?
- What’s a hedge fund?
- How to invest in bitcoin and cryptocurrencies?
- So much more.
I don’t believe the average person pursuing financial independence will need to know these topics. The time I spent learning these topics ended up being fun, but a distraction from the time that could have been spent elsewhere.
My personal path to building wealth has been one of relentless optimization. The focus has been on reading to understand small tweaks to my own strategy that could pay off big – most in the form of time later.
If you’re just getting starting today, and want to learn the basics of investing, I’d recommend checking out my free minimal investor course. We touch on a number of the investing-related topics on this list in a well-defined order that builds on each other.
Become a Minimal Investor
If you’re just getting into investing or the idea of financial independence, this list will seem intimidating. That’s OK! Treat it like a book. You don’t need to learn everything today. As I mentioned before, I learned these topics over 12 years. Some of them may not be relevant to your path to wealth either. My path was very much driven by index fund investing. If you’re taking the side hustle or real estate path, you’ll have a whole different set of things to focus on that I don’t have personal experience with.
What else should be on this list that isn’t? What are the greatest articles you’ve read on investing or FI that shaped how you think?
4 CommentsWhy not add to the conversation below? Your voice is welcome!
June 12, 2018
Hi Adam. What do you think about going with the motley fools as advisors
June 21, 2018
Hey Bunmi! I’m not too familiar with them actually. I’ve read their stuff over the years, and it tends to be more about maximizing returns while taking on higher risk. I’m not sure if that’s their advisor strategy, but it would be something to watch for.
I recommend trying them out advisors as a “fee only” style advisor if possible. That would allow you to talk with them, understand what they want to do with your money and how they can help. Laying out that plan in how you work together can be very useful.
June 12, 2018
Also how do people outside of America get to participate in the minimal investor course. You mentioned it’s for those specifically in America
June 21, 2018
Ohh yeah, good point. The topics from it could work for investors anywhere, but there are a few specific weeks that focus on US-only things. The main ones would be:
Week 4: Tax-efficient fund placement
Week 8: Tax implications
The different account types we have here in the US (401k, IRA, Roth IRA) are very specific for solving US tax problems. Depending on your country, there may be different similar account types or strategies to use, but unfortunately, I’m not an expert in those.