Ask Ysette: Should I Invest When the Market Is At An All-Time High?

I’ll be running an occasional series of financial Q&As. These are curated questions I’ve answered in other financial forums. I may edit for clarity and change details to preserve privacy. Remember, I am not a financial professional so this is for your entertainment only. If you’d like to as a question, please reach out to me through this blog.

Q: I recently got a chunk of money from the sale of my house. I plan on continuing to rent for the near- to mid-term so I want to invest this money. I’m afraid to dump it into the market though because it is currently at an all-time high. What should I do?

A: Ahhh, this is a very common question. There is a real emotional component to investing and a lot of people struggle with loss aversion at the idea of their hard earned money suddenly dropping in value right after it gets invested. As a result of this fear people can drag their feet on investing as they wait for “the dip” (“I’ll invest after the market corrects”). The result of waiting is usually that they miss out on the continued upward rise of the stock market while their money sits on the sidelines in cash, slowly being eroded by inflation. 

Is the solution just to hold your nose and jump into the deep end of the pool? In a word, yes. However it is a lot easier to jump in if you understand what is going on so it isn’t so scary. 

Have a look at this snapshot of several decades of the S&P 500 index. It is a bit of a wild ride. You can see how someone sitting where the X is debating whether to invest or not could reasonably say “I’m not sure about dumping my money in there since we are at an all-time high”. That person is correct, the market is at an all time high!

I purposefully didn’t include the dates so you can’t guess what will happen next because real life investing is like that. Unless of course you have a crystal ball, in which case please send me a PM so we can chat. 🙂 

Our hypothetical investor is in it for the long haul – perhaps this is retirement money we are talking about, so fluctuations over months or even years are okay in the long run. The question is then: should our investor jump into the cold, cold water of the deep end of the pool or perhaps wait for a dip or dollar cost average the money in over time? Let’s look at each of these in turn.

Wait For a Dip: Market Timing

Market timing is playing the game of watching the stock market fluctuate up and down while trying to time an entry (i.e. choosing when to invest) such that you buy when prices are lower. The hope is to buy low and then watch your investment go up and avoid buying high and watching your investment go down in the short term. Market timing can also be selling everything when you think the market will go down in hopes of avoiding a paper loss with the plan of re-entering the market at some unspecified future date.

Vanguard has done a study simulating what happens when an investor takes his or her money out of the market for various time periods ranging from 1 to 240 days in hopes of avoiding the worst days. This simulation showed that the average investor underperformed the market in every case. The more consecutive days the average investor is out of the market, the more the investor underperforms the market. 

But what about the extraordinary investor? I suspect that most people who try to time the market feel deep down inside of them that they are smarter than the average bear. Well, even the most extraordinary of investors, the top 1%, underperformed once they were out of the market for more than 135 consecutive days. In the best of cases with our 1% investor being out of the market around 35 consecutive days a year, the performance premium was around 1.8% over the market return. Ask yourself: is an additional 1.8% return a year worth correctly guessing when to get in and out of the market each year? That requires a lot of guesswork and/or luck as evidenced by the fact that 99 out of 100 people wouldn’t be able to achieve that. (Side note: you can play a game to determine how awesome of a market timer you really are here.)

Why is this? It helps me to think about the long term trend of the stock market. Thinking back to our investor wondering whether to invest or not, let’s zoom out and see what happens over time. 

S&P 500 index over time, 1927 – present, inflation adjusted

With the benefit of hindsight (or a crystal ball) the previously intimidating question of whether to invest or not at the red X seems insignificant compared to what the market did over the following decades. Yes, the ride was sometimes boring, sometimes too exciting, but the buy-and-hold investor would be remarkably well compensated for holding tight over the long run. The reason for this of course is that on average, over time the stock market goes up. Up, up, up. So the more time you spend invested in the market, the more time your money has to go up, up, up. 

Dollar Cost Averaging: Spreading Your Bets Out (Or Just Delaying the Risk)

Dollar cost averaging is a process by which an investor breaks up a sum of money into several portions that are then invested periodically over a set period of time. For example, an investor may decide to invest $10,000 in $1000 increments over 10 months instead of sticking it all in the market at once. This is similar to when you invest in your 401(k) or IRA each month when your paycheck hits, though technically that is periodic investing and not lump sum investing, as you are investing the money as soon as you get it (payday). When you invest each pay period you buy at market highs and market lows and everything in between. With your 401(k) you always invest your money as soon as you have it; with dollar cost averaging a portion of your money stays in cash while a portion of it is invested at regular intervals. 

Our trusty Vanguard has come out with another study where they investigated the differences between lump sum and dollar cost averaging (DCA). The study varied the time over which DCA was performed, the portfolio asset allocation, and even the country the investing was done in and found that overall lump sum investing produced larger ending portfolios in 67% of the cases. The reason for this is the same as above: on average, the market goes up more than it goes down, so on average, you will end up with more money if you are invested as soon as possible over keeping your money in cash. 

Pulling It All Together

The math is pretty clear: on average, you are better off dumping all of your money into the market immediately. Investing is never purely about math however. There is an emotional component that may be difficult to swallow. Two thirds of the time lump sum investing is the winning strategy, but what happens if you get unlucky and invest in one of the 33% of the times when the market goes down after you invest? If you panic and sell low, then it doesn’t matter what the math says because you just shot yourself and your portfolio in the foot. 

The most important thing in investing is to stick to your plan. If breaking an investment into chunks and investing incrementally will help you sleep well at night, then go for it. Just be aware of the tradeoffs and try to keep the period over which the dollar cost averaging takes place as short as possible.

Ask Ysette: How Should I Split My Investments Between Domestic and International?

I’ll be running an occasional series of financial Q&As. These are curated questions I’ve answered in other financial forums. I may edit for clarity and change details to preserve privacy. Remember, I am not a financial professional so this is for your entertainment only. If you’d like to as a question, please reach out to me through this blog.

Q: I am learning about investing and recently completed your Building Financial Wealth and Freedom: Investing module. When thinking about asset allocation, how would you recommend splitting the percentage of investments between domestic and international markets? For example, in my mind there are first world countries whose economies are stronger than my country’s economy, so in my mind it would seem like it’s best to invest in stocks overseas. Is that a good strategy or should I have some domestic investments?

That is a great question and demonstrates your level of sophistication with investing. Generally research I’ve read covering this topic tends to have a US bias, so the question is usually framed in terms of “should I invest in only US stocks or diversify globally?” To this question I’ll give you two answers.

First, many smart people will advise that you can invest in just US stocks and be done with it. (I’m thinking of people like JL Collins, author of The Simple Path To Wealth.) Historically the US stock market has done very well, though with the rollercoaster ride you learned about in the investing module. The argument goes that most big US companies do substantial business overseas and so that gives you the international diversification that people seek by investing elsewhere. This isn’t the strategy I choose personally, but I think it is very reasonable and has plenty of smart people who support it.

The second answer I’ll give is that diversification is the closest thing to a free lunch you will get in investing, so the more diversified you can be, generally, the lower your risk. I like to spread my stocks and bonds across the entire globe. The US stock market represents somewhere between 55-60% of the total global stock markets all put together as measured by cap weight, so my investment plan puts 60% of my stocks in a total US stock market index fund (VTSAX) and 40% in a Total International (also called ex-US, meaning the entire globe minus the US) Stock Market Index fund (VTIAX). Looking back historically the US stock market has outperformed the rest of the world, so portfolios with just US stocks have higher returns. That doesn’t mean that will be the case going forward. Who knows, maybe the US will lag in the future and the rest of the world will outperform! I don’t know so I place my bets on everything.

The caveat I need to mention is that if you are from a smaller country, having what is called a “home country bias” (ex. I live in England so I put 50% of my stocks in the English stock market) underperforms historically. It is also riskier. If your country was on the losing end of a major world war, past stock market returns were really lousy, unsurprisingly. If your country’s stock market only represents 5% of the global stock markets, it would be less diversified and more risky to put a bunch of money in that one country. 

Tl;dr: That is a lot of blah blah blah to say this: the more diversified you can be, the lower your risk, and the better you will likely be in the future. If you can invest globally in a low-cost, passive index fund, then that is probably the best choice.

Ask Ysette: How Do I Beat the Market So I can Make Up for Lost Time?

I’ll be running an occasional series of financial Q&As. These are curated questions I’ve answered in other financial forums. I may edit for clarity and change details to preserve privacy. Remember, I am not a financial professional so this is for your entertainment only. If you’d like to as a question, please reach out to me through this blog.

Q: Backstory – we just sold our home at a $600K loss – that was part of our retirement savings. Big UGH, but it’s over and done with and time to move on. Hubby is onboard with maxing out our retirement accounts, and we want to invest in some mutual funds. Looking for any fund recs – hoping to outperform the S&P and see some growth to close the gap we now have (thinking large cap, growth/income). I have been researching but there are sooooooo many options and they don’t seem to have an easy way to figure it out

Thanks for the help!

A: First, the loss you took on the house totally sucks. I’m sorry about that. I understand how that leads to a need to Do Something Now to try to recover. Note though that this is the same behavior that pushes gamblers back into the casinos after losing because they want to win back their losses. You know that doesn’t turn out well.

It might be good to take a moment to reflect on the house loss and grieve. We don’t know your circumstances, so maybe there is a lesson there for you or maybe it was just shitty lucky. The one thing we can say is you have learned that it is risky to tie up a lot of your net worth in a single asset, whether that be a single house, stock in a single company, Bitcoin, or Beanie Babies. 😉 So think about that for the future.

Next, you need to understand what you can and can’t control when it comes to investing in the stock and bond markets.

You can’t control what the markets will do in the future, whether they will perform spectacularly or dump or go nowhere. You aren’t going to get around this by trying to pick the best stock fund, so don’t try.

What you can control is: diversification, fees, and how much you save. Diversification is how you reduce your risk of loss of a single company’s stock sucking by buying lots of stocks. The best thing to do is buy All The Stocks through a Total Stock Market Index Fund. You can further diversify by buying a Total International Stock Market Index Fund.

Secondly you can control fees. Over time investing fees add up to a ton of lost money for you, so make sure you keep them as low as possible. Vanguard funds are excellent for this. American Funds are notoriously poor for fees.

Finally, you can control how much you save for retirement. Obviously the more you save the more you will have, but the double goodness of that is the less you spend, the less you need for retirement. So focus on that because you can make big strides towards your goals by controlling that.

Again, best of luck to you and sorry you are going through this disappointment. You can totally recover.

Financial Education!

A while back I was approached by someone asking me if I was interested helping out with developing some financial education topics. Being the nerd that I am, I jumped at the opportunity to have some fun preaching the gospel, as it were. Figuring out what I wanted to cover was pretty easy; actually pulling together the content was another thing all together. I am not totally finished yet, but I have a solid start, and am sharing the links here.

Teacher, from the Occupations for Women series (N166) for Old Judge and Dogs Head Cigarettes
I totally look like this when I create financial education modules

The target audience is anyone with no or little financial education who would like to learn the basics and set themselves on a path to financial security. I’ve broken them into multiple modules, each covering one topic. This is a work in progress, so please leave your comments in the survey at the end so I can improve the content.

You can check out the Financial Education page where I have modules covering the following topics:

  • The Basics
  • Achieving Financial Security
  • Banking
  • Loans
  • Insurance
  • Investing
  • Taxes
  • Bankruptcy
  • Identity Protection

Modules in work include Education, Real Estate, and Financial Independence. Check back, well… eventually for those.

Why Investment Fees Matter

My investing career started when I was a teenager and my mother opened up a Roth IRA for me as soon as I had above-the-table income. (That is what you get when your mother is an accountant!) She asked me what I wanted to invest my money in and I replied “the S&P 500” because it was the only thing I had heard of. Looking back on it, that was a pretty decent choice, but it took me another 15 years before my understanding of investing went beyond a vague understanding of what a stock was. It was a good while longer before I learned about investing fees and why I should care about them.

What Are Fees?

When you invest in a mutual fund there is a cost associated with it. This cost pays for the fund managers who do their magic behind the scenes to make it easy for you to invest in hundreds or thousands of stocks with a few clicks in the comfort of your pyjamas. If you invest with anyone other than Vanguard, these fees also pay for profit and advertising and shareholder dividends and the like. 

As an example, let’s look at some different S&P 500 index funds and see what kind of fees they have. I’ll start with Vanguard’s fund VFIAX, as Vanguard is the low-cost industry leader. As expected, the fees, or expense ratio as it is known, are low. 

For comparison purposes I’ll next choose another S&P 500 index fund at random, PEOPX, and finally throw in the worst S&P 500 index fund of the lot, RYSYX. I’ll explain why it is so bad in a little bit. 

I’ve circled the expense ratios in the images above to make it easier to pick them out, but let’s summarize in a table. Let’s also translate an expense ratio into dollar amounts to make them more relatable. An expense ratio is the percentage of your invested assets you pay each year to the brokerage to invest in the fund. 

Expense Ratio0.04%0.50%2.43%
Fees per $1k invested$0.40$5.00$24.30
Select S&P 500 index fund fees

I’ve purposefully picked funds with a wide range of fees. The difference between 40 cents and almost $25 is huge, but you can reasonably ask “Why should I care that much?” After all, the costliest fund I show here isn’t even a nice lunch out these days. 

This is true, but this neglects two points. 

  1. This is the amount you pay per thousand dollars invested;
  2. This is the amount you pay each year, which becomes increasingly important as time goes on due to the power of compound interest.

I’ll illustrate this with some more math. Let’s say that you have $10,000 initially to invest and you are going to contribute an additional $5k each year for the next 30 years. This is a reasonable scenario for someone funding an IRA. I’ll use one of many online compound interest calculators to do the heavy lifting for me.

Initial Investment$10,000
Yearly investment$5,000
Average return rate6%
Expense Ratio0.04%0.50%2.43%
Fees per $1k invested$0.40$5.00$24.30
Total invested$160,000.00$160,000.00$160,000.00
Total Fees$3,742.05$44,506.64$177,371.56
End Value$472,701.25$431,936.66$299,071.74
S&P 500 index investments after 30 years

Wow. Look at how the seemingly small differences in expense ratios add up over time. You would be $173k poorer investing in the RYSYX index fund versus its Vanguard counterpart. And the thing to keep in mind here is that these are all S&P 500 index funds – in theory the same thing! Just to drive the point home, I’ll show the same data in a visual format.

S&P 500 index investments after 30 years: a pretty graph this time

A 2%+ expense ratio is egregious and thankfully, fairly rare these days. But let’s not miss the 0.5% expense ratio and how it stacks up. While it is significantly better than the worst fund, over 30 years of investing you would still end up $40k poorer investing in PEOPX than if you had chosen VFIAX. $40k is nothing to sneeze at when saving for retirement. $40,000 is, in fact, a full quarter of the total amount you invested over the years ($160,000). So while expense ratios are arguably pretty darn boring, it is worth paying attention because these seemingly small numbers have an outsized impact.

What is “Risky” and what is “Safe”? – Volatility and Inflation

Often I will see someone new to investing talk about being scared to invest in “risky” things like the stock market. When the world of investing seems wild and unknown there can be a psychological preference for “safe” investments like CDs or bonds, or something that is easier to intuitively understand, like real estate. The use of terms like “risky” and “safe” in the context of investments is one of my pet peeves, so I’d like to break this down and encourage us to use better language to describe these commons terms in personal finance.

In the world of personal finance and investing there are two most common risks that get discussed often: volatility and inflation. Volatility is a short-term risk, and describes how an investment can fluctuate in price over a short time period. Think of a roller coaster going up and down, sometimes at  breathtaking speeds. 

S&P 500 Index – 1927 to present (source)

The S&P 500 is a stock market index tracking the 500 largest publicly-traded firms in the US as measured by market capitalization. As you can see from the graph above, the price of this basket of stocks is pretty volatile, meaning the price fluctuates quite a bit over time. Sometimes the price squiggles just a little bit and sometimes it takes some deep dips, erasing years of previous gains in a short period of time.

Inflation is the idea that over time a dollar is worth less and less because the cost of goods slowly rises. 

Often when inflation is discussed as a risk people implicitly mean hyper inflation, like present-day Venezuela or Germany after WWI**. While wheelbarrows full of bills used to buy bread is a dramatic example, inflation under normal conditions is much subtler and only shows its force over time. 

Inflation in the US varies over time, but over the past 4 decades or so it has hovered around 3%. The Fed currently has a target inflation rate of 2% consistent with their target of strong employment and price stability. These are nice, low numbers, but keep in mind that any time your money earns less than inflation, it is like a little mouse nibbling away at the edge of your cookie; those bites are small but if you let it go on for long enough you will soon find yourself with little cookie left.

What this means for investing and retirement

Before her death my grandmother had her nest egg in CDs. She felt comfortable with this nice, “safe” investment. She likely remembered being retired in the early 1980s when CDs were paying 10-12%. The problem with her “safe” investment is that every year she was losing ground. 

Turning to my favorite portfolio simulation tool I modeled what my grandmother’s retirement spending might have looked like. I assume she retired with a nest egg of $500,000 and spent $20,000 a year, adjusted upwards for inflation. We’ll run this simulation for a 30-year retirement.

Starting portfolio$500,000
Yearly Spending$20,000
“Safe”: 50% bonds / 50% cashBalanced: 50% stocks / 50% bonds“Risky”: 100% stocks
Portfolio success rate4693%95
Average ending portfolio value$197,757$654,456$1,530,860
*Assumes 5% average growth of cash

Nest egg performance of “safe” and “risky” portfolios

I find the results super interesting so let’s notice a few things:

  1. The “safe” (i.e. low volatility) portfolio composed of half cash and half bonds fails over half of the time and on average leaves you with less than half of what you retired with.
  2. A wildly inappropriate “risky” portfolio of all stocks is successful 95% of the time and leaves you with three times as much money as you retired with, on average. 
  3. A balanced portfolio, so called for being half stocks and half bonds, has pretty much the same solid success rate as our crazy all-stock portfolio. Having those bonds smooths out the wild fluctuations of an all-stock portfolio but we pay for it by not being nearly so rich at death. 


Looking at these results you can see why I cringe when I hear portfolios heavy in bonds and cash dubbed “safe” and stock-heavy portfolios referred to as “risky”. In the short term volatility is risky and inflation doesn’t really matter. However in the long term volatility hardly matters at all but inflation is the biggest risk to your portfolio. We need to be more precise when identifying what risk we are talking about. 

If you need your money soon, say for a down payment, then you can’t tolerate the volatility of the stock market and so keeping your money in cash is indeed “safe”. However when investing for the long term like your retirement, “safe” investments that don’t outpace inflation are one of the riskiest things you can be in. That is why I always use “high volatility” and “low volatility” to describe investments, or otherwise make sure to specify what risk I am referring to. I encourage you to do the same. 

**Side note: I spent a summer in Russia in 1997 when the exchange rate was around 5,700 Ruble to the dollar. I remember pocketing a 100,000 Ruble note when heading out for a night of dancing and drinks at the discotheque. Soon after I went home Russia cut three zeros off the Ruble and issued new currency.

Do You Want to Act Rich or Be Rich?

When I was a kid I was socially awkward and nerdy. Somehow my meager clothing allowance never seemed to extend far enough to get me anything that felt cool. I managed to tie those two things together in my mind and came to believe that if I just had enough money to wear fashionable clothes to school I’d be transformed into a confident, outgoing person several rungs higher up the social ladder.

When I got my first job out of college it was therefore important to me to finally be able to dress the way I had always wanted to. Ann Taylor Outlet was my friend and I stocked my professional wardrobe with lined slacks and silk twinsets. I got myself the leather “ducky bag” purse women in my family had always carried when I was a kid. I had the outer trappings of having made it.

Being early in my career my bank account and 401k were about as empty as my professional resume. I slowly began to understand that I couldn’t just jump to the finish line by merely looking like a successful adult; I had to take the time and do the hard work to earn my way to that position in life, in my career, and my finances.

A lot of people fall for the trap of believing that being rich is owning a lot of expensive stuff. When people express the desire to be a millionaire, often this means the literal opposite “I want to spend a million dollars”. The problem with this is the desire to spend like you are rich is exactly the behavior that will prevent you from ever being rich. So you have to ask yourself, what is more important? Acting rich or being rich?

Personally I started out by wanting to act the part without the bank account to back me up. Soon enough I learned that this gave me a hollow feeling. I looked smart but I was afraid of a big expense popping up that would expose how fragile my financial situation really was. Slowly I built up my emergency fund and my 401K, opened an IRA, and got myself on the path to having real wealth. Over time a curious thing happened to me; the more things I could afford to buy, the less I wanted to buy them. In the process I realized that more than being able to buy things, what I really crave about money is the freedom it gives me to pursue whatever opportunities life may put in my path. 

So here comes my personal definition of rich: having enough money to have the freedom to do what I want with my time. What is rich for you?

Money Is Just A Tool

Part of our problem with talking about money is the emotions and judgements that get stirred up. If you don’t have enough of it thinking about money may make you angry, jealous, or make you feel like you aren’t in control of your life. There are those who think money is the root of all evil and prefer to avoid it as much as possible. Others may believe that the key to happiness in life is just being able to finally get enough money to fill in the blank.

However peeling back all of that emotional baggage, at the root of it money is simply a tool, no more, no less. It is a tool that allows us to convert our labor into goods and services we want. Before money this process was (and is still) achieved through bartering. “I’ll work my garden and grow these vegetables and exchange them for the eggs your chickens laid.” The benefits of using money over bartering are numerous. A few of them include:

  • Store value over time – I can exchange my money for eggs three months from now instead of today. Money, conveniently, doesn’t rot like my veggies will. 
  • Facilitate multi-party transactions – I have vegetables and want eggs, but the person with eggs wants his wheel repaired and the wheel repair person is interested in vegetables. Without money coordinating this exchange of goods so everyone is happy is a logistical nightmare.  

In today’s economy things are a lot more complex than in the example above, so I find it helpful to think of money as described in the book Your Money Or Your Life. This book teaches us to think of money as our life force, meaning we convert our time and energy and labor into money which we then use to spend on whatever we want. The book encourages us to calculate our after-tax, take-home wage and then convert the purchase price of things into hours of work. If my take-home pay is $20/hour, buying those AirPods means an additional 8 hours of sitting at work. Is that worth it? Maybe it is, maybe it isn’t, but the important thing is to recognize the tradeoff being made in that purchase decision.

Like any tool, money can be misused by those who don’t have the right skills. In the hands of someone with knowledge and experience this tool can be used to make beautiful things. I know which category I’d like to be in. Will you take the time to learn how to use this tool wisly?

Becoming Rich Is Not Easy, But It Is Simple

You want to get rich, right? I want to get rich. Hell, we all do! That is the American Dream. Or something. In any case, building enough wealth to at least be secure and not stay up at night worrying about money is a great goal. So roll up your sleeves and let’s get started.

If you’ve never had money or are just one of those for whom money seems to be like water that just slips between your fingers and is gone, getting rich may only seem possible for those who win the lottery. Setting aside the part where many lottery winners eventually go broke, most people who have substantial wealth didn’t get that way overnight but built it up over time. I’ll share with you the very secret, complex, and magical formula for how they do that:

Earn > Spend

Translating that into English: Spend less than you earn, and save the difference.

To turn that into a (truly appalling) image, let’s think of money as water flowing through a pipe. The money you earn is the money coming into the pipe from the left and your spending is money flowing out on the right.

Earn = Spend

If you spend as much as you earn, then the water (money) just flows right through your life. You can see that as soon as you stop earning money, you’ll quickly have no money. (Hint: this is what most Americans do)

Earn > Spend

When you spend less than you earn, you start to build up a pile of cash. In our water example you might break your hose and blow water all over the place. Luckily with extra money building up the result is usually happier and a lot less messy.

Of course, there are lots of details that are getting glossed over here, like how to earn more money, how to spend less, what to do with the extra money you save, how to know when you’ve saved enough. I’m also not saying that it is EASY to spend less than you earn. That takes willpower and delayed gratification and other adult-y kind of things which we will cover later. However you can’t deny that on the surface, building wealth is SIMPLE.

Why We Should Talk More About Money

The old expression goes that you should talk about religion or politics at a dinner party for fear of wading into shark-infested waters. (Side note: remember back in Before Times, when you could get together with friends in person?) We do sometimes broach these subjects, infrequently to have measured, thoughtful exchanges of ideas, and more often to just shout randomly into the void over social media. A more stubbornly taboo topic remains money, in particular personal finance. I expect most of us would rather explain how sex works to prepubescent kids than share details of our balance sheets with friends and family.

Why this taboo? In part it is because money carries with it a good deal of baggage. What it means to us personally, what our relationship with it is, whether we had enough of it or not growing up, what we feel about people who have less or more than us, to what extent we conflate net worth and worthiness as a human being. All of this means that opening up about personal finance is scary because you don’t know how another person will judge you.

Not talking about money more openly however has downsides. Much like sex, money is something that we will all experience in our lives at some point. Also like sex, financial education leads to better decisions and better outcomes. Depending on the state you live in, the sex education you receive at school may be anything from comprehensive to shitty. On the other hand, almost no one learns good financial education in school, all the more reason why we should talk about it more in real life. 

“But eek!”, you say. “I don’t want anyone to know how much money I have in the bank!”. And that is fair. I’m not going to tell you my exact number either. But we can talk generally about finances and the decisions we make. For example, right now the only way we judge someone else’s financial status is by exterior signalling – what car they drive, where they live, what clothes or gadgets they carry around. As we know, these signals can be very misleading. Does my neighbor drive a Tesla because she is rich or does she have nothing saved and can barely make the payments? 

What if instead of proudly posting pics of a new purchase we bragged about front-loading our IRAs in January? Could you get comfortable turning down an invite to dinner and saying “i’m saving up for X instead” rather of making an excuse? If so then I’d like to recruit you to help me break down this taboo.