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If you’re looking for a new credit card, head to my website to find a guide with dozens of the best cards for travel, business, restaurants, and more.
Without further ado, your Tuesday newsletter.
The best articles I’ve read recently.
The best time to invest (Of Dollars and Data)
This “hot” TikTok Investor tip is total bullshit (Personal Finance Club)
Hidden credit card benefits (All the Hacks)
If you don’t understand credit, read this (Choose FI)
A case for conservative optimism (Mr. Money Mustache)
The type of shit you should ignore.
It’s Time to Switch from Passive to Active Investing
Bitcoin, Ethereum Technical Analysis: Read Here
Technical analysis is when people use charts (previous stock behavior) to predict a stock’s future movement. You can say that I’m skeptical.
Tips from Christian Lagerling, CEO & Founder of Beluca Ventures
Another Tuesday means another interview with a personal finance expert.
This week, I spoke to Christian Lagerling, serial entrepreneur and private equity investor.
Here are my two favorite questions from the interview:
Cole: If you could give your 25-year-old self one piece of advice about managing money, what would it be?
Christian: Buy real estate and hold onto it. Buy a globally and sector-diversified passive stock market index fund and hold it. Do NOT trade stocks short-term.
Cole: Are there any books or resources you regularly point people to?
Christian: The single best resource is Berkshire Hathaway’s* annual shareholder updates. These give you 95% or more of what you need to know. The vast majority of “business” and investment books are pointless.
*Berkshire Hathaway is run by Warren Buffet, who also writes the shareholder letters.
Reader: I want to invest, but I don’t know what to buy.
Cole: If you’ve never read the disclaimer at the bottom of my emails, please do so now. I’m not an investment professional, and I don’t know the specifics of your life. Please do your own research.
That said, here’s what I’ll leave you with.
Most people are better off:
Not buying individual stocks
Buying low-cost index funds like a total U.S. stock market fund or an S&P 500 fund
In The Simple Path to Wealth by J.L. Collins, he reveals his investing strategy, and it’s so simple you probably won’t believe it.
He buys ONE index fund: VTSAX | Vanguard Total Stock Market Admiral Shares
Expense Ratio: 0.04%
Return since 2000: 7.44%
Read the full interview above, and you’ll get some great ideas on what to buy.
Together with Personal Capital
I’ve used Personal Capital as a net worth tracker since my net worth was -$72,071.10 in 2019. Yes, you read that correctly.
I loved tracking my net worth as I climbed out of debt because it was so satisfying to watch it go up and to the right.
If you’re looking for a FREE way to link your financial accounts and track everything with one, clean dashboard, then Personal Capital is a great fit.
Personal Capital Advisors Corporation (“PCAC”) compensates Junto Media LLC for new leads. Junto Media LLC is not an investment client of PCAC.
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Principal and interest payment on a $500k mortgage (30-year):
@ 3.11% it’d be $2,138 (i.e. Dec. 2021)
@ 7.37% it’d be $3,452 (i.e. Oct. 2022)
@ 5.99% it’d be $2,995 (i.e. today)
— Lance Lambert (@NewsLambert)
Feb 2, 2023
Interest rates confuse people.
This tweet from Lance shows a clear impact of interest rates on monthly mortgage payments.
Notice how the interest rate percentage impacts the monthly payment even though the loan amount and the loan term (length) are the same.
It’s not crucial to follow every aspect of the news (nor is it possible). But keeping an eye on interest rates helps make a handful of critical financial decisions like how to borrow and what to do with cash.
I’m feeling generous.
You get two extras today and both are interest-rate related.
Lots of people are sharing 4-4.5% interest accounts, but those are rates likely won’t be around by year end (I’m guessing rates will be lower).
Smart move is to lock-up cash that you don’t want to invest in risk assets in a long-term CD to maintain a 4-5% rate.
— Matt Paulson (@MattPaulsonSD)
Feb 6, 2023
High-yield savings accounts, like Wealthfront, are offering 4% APY, but that is not always going to be the case.
When and if the Fed cuts interest rates, Wealthfront (and other high-yield savings options) will be forced to cut their interest rates too.
With a certificate of deposit (CD), however, you can lock in your interest rate.
So, if you have cash that you genuinely do not need, it makes sense to shop for a certificate of deposit.
Important to note – CDs differ from high-yield savings accounts in that you must pay the penalty to withdraw your funds if it’s before the term length.
That’s it for today! If you have ten seconds, share your referral link with a friend or two. Your support means the world and allows me to keep working on Junto.
PS: Learn why people do what they do.
Disclaimer: This newsletter is strictly informational. It is not investment advice, tax advice, financial advice, or a solicitation to buy/sell any assets. Please do your own research. You’re an adult and you’re responsible for your own decisions. This newsletter may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links (at no cost to you).