When I first graduated and I got real paychecks, I sort of avoided personal finance for a while. It was really confusing, everyone had very different opinions online, and it seemed like every app wanted my money. I focused on working instead and I did the bare minimum of enrolling in healthcare and company stock.

Eventually, when I started to think about starting my own business (aka no paychecks for a while), I started to get obsessed about personal finance. Stocks were roaring, inflation was ripping, and I still didn’t really know what my 401k meant.

TL;DR

1. 6 months expenses in Cash in a Fidelity Money Market Fund, paying at 4% interest
2. Auto-pay credit card, with an optimized cashback setup, no annual fees.
3. Got matching for my 401k contributions, then maxxed it out for a Target Date Fund
4. Maxxed out my Traditional IRA, then backdoored it into my Roth IRA split 70-30 between Total Market US - Intl

1. Emergency Fund

All I did was download a budget app, integrate my credit cards and bank, and I got my monthly spending after 2-3 years of spending. Then I stopped using it. You can do $6 * \text{monthly spend}$ to get the emergency fund.

I didn’t really understand this for a while. Isn’t all of that cash losing out to inflation? Yes, but cash is king. When I actually left my job, I was thankful I had so much cash as the markets temporarily collapsed.

There are a number of ways you can protect your “cash” from inflation. With high interest rates, I started with HYSA, but then got deep into Bonds, Treasuries, MMF, CDs, TIPS, Stablecoins. I had no idea what to do, it gets complicated fast:

Instrument	Risk	Liquidity	Inflation Protection	Tax Treatment	Insured?
High Yield Savings (HYSA)	Very low	Instant	No	Interest taxed	FDIC
Money Market Fund (MMF)	Very low	1–2 days	No	Interest taxed	SIPC
Treasuries (T-Bills, T-Notes, T-Bonds)	Low	Tradeable	No (unless TIPS)	Fed tax only (no state)	No
Treasury Inflation-Protected Securities (TIPS)	Low	Tradeable	Yes	Fed tax only	No
Certs of Deposits (CDs)	Very low	Locked (penalties)	No	Interest taxed	FDIC
Bonds (corporate)	Med	Tradeable	No	Taxed	No
I Bonds	Very low	1-year lock	Yes	Fed Tax only	US Govt
Short-term Bond ETFs	Low	Tradeable	No	Taxed	No
Stablecoins	Med	Instant	No	Interest taxed	No
I tried a mix of some of these, until I landed on a MMF for the emergency fund. For emergency funds, I need instant liquidity, so it narrowed it down to HYSA, Stables, MMF. Out of those, MMF was the highest yield after taxes. Most people don’t know their interest on HYSA or Stablecoins are less once taxed.

I chose FDLXX at $4.5%$ because it auto-liquidates in Fidelity to cash, reasonably low risk, and it only incurs federal tax, no state tax. Then, I don’t really touch this account. I set FDLXX as a weekly autobuy to keep it at 100% FDLXX with interest it gives me. It sells FDLXX to buy things, so it’s just a easy way to keep it topped up.

I also have a regular ol brick-and-mortar bank for 1mo emergency fund. This has straight USD cash in case Fidelity ever breaks.

2. 401ks

I am glad I set up matching early on with the advice of a colleague. I got up to $2%$ matching, so I contributed $2%$ to get $4%$ in my 401k. This is essentially free money towards your retirement, so it’s worth to do the highest amount you can first.

Once I got comfortable with what I spend and what I have, I maxxed out my 401k up to the yearly limit of ~$$20,000$. This is conventional advice. There’s mega backdoor 401k’s too, but I’m not a firm believer in locking up that much money until you’re retired.

I chose Vanguard Target Date Fund 2065 when I didn’t know anything and I have no issues keeping it there. It’s a low expense ratio and aggressively stocks, but it still has some bonds.

3. Priority Bad Debt

I don’t have any college debt. My parents have been very helpful in helping me avoid debt. I worked 6 tech internships before I graduated and I also received academic scholarships. I consider myself very lucky to have no experience with how to pay off debt.

I set up my credit card autopay for each of my cards. I add each one to my calendar as an all-day activity and I changed their statement date to be spaced out across the month. It doesn’t matter much since I pay it all off, but it makes it so I’m not hit with bills at the same time.

I don’t have a car or own a home. In most cases, you actually break even on expensive NYC rent if you factor in car costs for other cities. There are definitely a car-free walkable gems with low rent though.

4. Credit Cards

I ignored credit cards for a while, then I got obsessed with credit card optimization, and now I’m back to credit card points are only worth it for a very specific person and lifestyle.

Points work if you naturally spend lots of money on travel, going out, and restaurants. If you are reimbursed by your company, this also fits great as your spend is inflated. Points make travel way cheaper than cash, especially if you want to fly business and luxury hotels. They’re also great for lounges. If you are OK with this spend (you love the lifestyle more than annual cost of $500-$700 per card), then it fits great.

Credit cards work because interest payments of $$27.99%$ work, but ALSO because people justify their annual fee with travel or restaurant credit. When I was on these cards, I really was incentivized to spend more at these places. Yes I use Uber and Resy, but would I use it as much if I didn’t get credit? I live a modest life and my favorite things are pretty cheap, I realized I was lying to myself about this spend. Plus, these companies pay your friends to refer you and influencers to talk about their updates all the time.

The haydays of credit card churning are pretty much over. I was lucky to get huge point bonuses for the Amex Gold, Chase Sapphire Preferred, etc, but, after the points, I don’t break even on spend with an annual fee. I felt like the poorest man alive trying to make the credits work. I cancelled those cards, which drops your credit history, but it made a minimal change to my credit score. You can keep your credit history if you can change to a no-fee card and not use it, which is what I did for most.

I use an optimized cash back system. Usually they give me points that I auto-redeem into cash to my bank account. I found myself just holding like $1000 worth of points sitting at 0% APR. Plus, points cards just keep changing. I would rather just get cash.

My biggest categories:

Category	Cashback	Card
Rent	1x	Bilt
Dining	3x	Bilt
Groceries	5%	Citi Custom Cash
Wellness	5.25% (online)	BoA Customized Cash
Transport	20%	Buy on-sale Gift cards
Travel	5.25%	BoA Customized Cash
Clothes	5.25% (online)	BoA Customized Cash
Events	5.25% (online)	BoA Customized Cash
Misc	2.62	BoA Travel Rewards
[^1] [^2]

Cashback will never be better than 2% (they can’t make money). So all of these will be nerfed eventually.

• Bilt is surely changing soon
• Citi is at a really low maximum, I think $500 / mo.
• The BoA Customized Cash requires holding $100k in a Merrill Lynch account as a Preferred Rewards Platinum Honors member. It’s also at a $2500 / quarter limit.

Once you get to a certain spend level, credit card cashback or bonuses do not matter. All of the above cards have strict limits where you don’t get any cashback after a bit. I don’t hit any of them naturally, but if I had to calculate them, it would make credit cards optimization not worth my time. If I were to recommend a simple card, I would do the Fidelity 2% cashback or the Robinhood 3% if you spend more than the $60 Annual Fee.

For taxes, I do pick a card to churn a few months before. This happens about once a year, which is a slow enough speed to churn for an international trip. I’m not fully optimized here, but I don’t care about flying business or crazy hotels when I’m in my 20s. Churning is not a fun hobby for this reason. I usually just get my sign up bonus and use it to buy my ticket.

More on the system of Credit Cards

Investment Retirement Accounts

You should start this asap. You can contribute ~$$7000$ yearly to an IRA. You can take the money out at a penalty if you really need whereas you cannot really do that on a 401k.

Usually you need to pay taxes either after you get paid and after you sell your investments.

• If you do a Traditional IRA or Traditional 401k , you skip taxes on income and pay taxes only on investments.
• If you do a Roth IRA or Roth 401k, you pay taxes on the paycheck but you skip taxes on investments

I had to figure this out through a Financial advisor at first, but my income at the time was too high for a Roth. But somehow tax codes permits you to simply contribute to an IRA and then move it to a backdoor Roth. This is just an extra button to tap. I do this every year all at once.

I invest into FZROX - US Total Market and FZILX - International Total Market at a 70-30 ratio. FZROX and FZILX have 0 expense ratios, but the catch is you can’t use them outside of Fidelity. I use them in my Roth IRA since it’s already pre-taxed, so you get the benefits of no fees while still being able to sell them in case I need to move elsewhere.

Most people use VTI (US Total Market) and VXUS (Intl Total Market) outside of Fidelity. Or if they’re lazy and they don’t want to rebalance, they just do VT (Total Market). Some would rather choose the proven winners: VOO (SP500) and QQQ (Nasdaq-100). More strategies: https://www.bogleheads.org/wiki/Three-fund_portfolio

I have no experience with govt retirement accounts or pensions.

HSA / FSA

I avoided this for the longest time as I did not have a healthcare account that fit. This is pre-tax and post-tax which is very useful, but it’s only useful for healthcare things. I am healthy and I don’t spend much of anything here, so I skipped it for years.

However, it’s useful to start contributing anyways. Inevitably, you will have medical bills and they will probably be huge. The definition of healthcare related things is huge. Glasses, Braces, Mental are all related things that can be paid.

Budgeting

I use a basic spreadsheet and I just do a monthly roundup of my transactions. I have every transaction since I was 18. I do not use any apps, I log in and download my statements and I auto-input it into my spreadsheet.

I don’t do any budgeting methods like enveloping either. I have immigrant frugality and startup founder runway baked into my brain so I have no advice here.

This spreadsheet was made by Tiller.

Spending

If you’re a young high earner, you will quickly realize money isn’t everything. You are undoubtedly better off. But most of the problems are still there. I’ve seen all of these happen:

(1) follow non-lucrative passion (music, cooking, painting) (2) scale their lifestyle (michelin, business class, clubs) OR get into previously unattainable hobbies (traveling, watches, cars) → focus on making more money to keep these hobbies going

None of these are wrong.

If anything, I should live a little more. Flights are cheap is the saying. The idea is if you can visit someone for $150 and make a deal worth even $1500, you should take the chance. When I was suffering from allergies in NYC, I couldn’t get anything done. I tried meds and being inside all the time, but I was still insufferably inflamed. Booking a cheap domestic flight and living somewhere else immediately would’ve solved the problem, even if there is no big number to call as cost-savings.

Spending money on gifts, paying for meals, hosting events are all things that don’t affect your goals at all. People are sometimes weird with money, whether it’s emotional baggage from childhood or anxiety. I think the truest sign of wealth is generosity, not the number.

Taxes

As a 9-5 employee with no home, there are almost no tax tricks not mentioned above.

Simplest ones: avoid short term capital gains tax

More advanced: do some tax loss harvesting

As a business owner, there’s way more.

Unfortunately, I haven’t looked too deep into this yet.

Employee Equity

For public companies, I do Employee Stock Purchase Plan, which gives me 15% off. You can sell this immediately or wait for long term capital gains tax or try to time the market.

I have no experience with RSUs.

I am keeping this light as My Philosophy is not really recommended. TL;DR I haven’t sold any equity or ESPP

Portfolio and Net worth

I have a Portfolio Tracker on Google Sheets where I have my assets categorized. I update this whenever I change my investments, which is almost never. It shows my net worth, proportion of stocks vs bonds vs crypto vs etc. and it shows my proportion of US stocks vs Intl.

I get live asset data from Google Finance, but you can also just plug in written data if you want. I use this just as a way to track net worth historically to keep my ego in check and it’s a good way to understand if I need to rebalance when certain equities outpace each other or not. I rebalance once a year around tax season with the pie chart.

This spreadsheet was made by DaveTracker. I edited the spreadsheet to create a historical net worth tracker, which requires historical pricing from Google Finance + historical investment assets transactions.

Investments

Investments gets really complicated. Once I have all of the above checked off, I am free to do whatever I want. I am lucky to be able to max these accounts out and have money left over.

I split my paycheck between all above sources on the day of the paycheck. There are some apps that allow you to basically get a loan to get an early paycheck (Sofi even), but it’s unnecessary.

I’m young enough to not have any upcoming financial goals (car, grad school, weddings, a house, children). For myself, I know those things are nebulously expensive, but I wasn’t able to clearly define if I was on track to affording them.

I wrote out a general targets for things I wanted in the next 10 years (a wedding, a house, children). I was shocked to learn the costs, but I wrote the unrealistic numbers down anyways. Based on how much they cost, I created segregated taxable accounts for each of these goals and labeled them so.

1. 10% MARRIAGE - Experiences Fund
2. 40% HOUSE - Home Fund
3. 20% CHILDREN - Family Fund
4. 20% INVEST - Coinbase, Robinhood, etc
5. 10% PERSONAL BANK - Bank

Marriage is uncertain but probably less than 5 years. I am maintaining this as mostly cash instruments, likely CDs once I get to it.

My house and children are at least 6+ years away. For this reason, I’m keeping the investments as VTI. I have one account in Merrill Lynch that doubles as my Preferred Rewards Platinum Honors status with $100,000. The children account is kept in some mix of aggressive big cap and VOO.

My personal bank is Cash Management Accounts in Fidelity with FDLXX MMF for highest yield and instant liquidity, No Fee ATMs, bills, wires between all my financial accounts. The only issue is no zelle, but I just use my regular bank for this.

I do personal investments with 20% of my spare money in Robinhood, Coinbase, and various crypto wallets. If it goes to 0, well, I have peace of mind that I still have money for my other goals. This helped me tremendously with feeling like I could spend money or invest.

My Philosophy

This is not financial advice.

I read Bogleheads, several finance books [^3] , a few other retirement forums during this period. Generally, the ideas are:

1. Don’t put all your eggs in one basket
2. Time in market > Timing the Market
3. Any cash you hold will degrade in value by inflation
4. Stocks are the best stable growth to outpace inflation.
5. But stocks can crash, so you should have other assets to prevent all your money disappearing

Their philosophy:

The best way to diversify is not just buy many diff stocks, but buy … every stock. This is why people buy ETFs with the Total Market. It also prevents you from fidgeting if tech stocks fall or oil stocks fall. Not only that, you should diversify against stocks with bonds and real estate and other proven investment classes.

Can this really be true? Is investing this simple? Why do other people angel invest? Why are hedge funds, private advisors, and roboadvisors alive then?

My take:

Total Market and some form of interest-bearing bonds is free game. If you are under $1M NW, you should 100% do this. But it’s also just defending against inflation. You are not really making any money. You make money by working or something others don’t do (whether trading or business).

For me, I am young, I am in startups, and I want to grow my money. I’m optimistic towards other asset classes like starting businesses, crypto and angel investments, even if there’s way higher risk for failure. I also would rather take the shot at becoming 30M+ wealthy than be certain I will be 1-5M wealthy. You do have to figure out the first parts though. It’s easy, but it requires diligence.

I will be the first to admit I was diligent and I got lucky with timing to have enough early in my life to have an emergency fund + more. Wealth is created by taking many shots and getting lucky once. But you can’t take shots unless you have backup plans. I think it’s fair when people critique nepo babies, but I also think it’s unfair to consider all of them untalented.

Alternative asset classes like Venture Capital, Private Equity, Hedge Funds are most likely inaccessible, but they exist not because they are way better in returns, but because they hedge against the market. Most liquidity providers (the people that give money to these firms to invest) are heavily invested in the market, but they are focused on wealth preservation.

Anyways, the path to wealth is weirdly simple. Be creative with the ways you spend it. Wealth is also meant to be spent on your life. Enjoy it. Do things you like. Life is short.

• Books
  • The Simple Path to Wealth
  • A Random Walk Down Wall Street