Judging Risk, Personal Cash Flow, & More

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Welcome to Junto, a weekly newsletter where I share tips and strategies to help you save, invest, and spend smarter with less time and effort.

Today’s Topics

Why we’re bad at judging risk

Understanding your investing time horizon

Increasing your income and savings rate

Personal cash flow > income

Read This

The best articles I’ve read this week.

You only need to get rich once (Ben Carlson)

Personal finance jargon that sucks (Verbatim Financial)

The insurance product is being aggressively (illegally?) sold on TikTok (Personal Finance Club)

It may be a mistake to buy that new car (Financial Samurai)

Top lessons & credit card hacks of 2022 (All the Hacks)

Growth Strategies of Top Creators Straight to Your Inbox

Each week, Chenell Basilio explains how top creators grew their business from $0 to $1M+.

Get the roadmap to replicate their growth – without 40+ hours of research.

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New on Junto

Risk and Why We Fail to Learn from History

“If more information was the answer, then we’d all be billionaires with six pack abs.”

Derek Sivers, Author and Entrepreneur

We underestimate investing risk the same way our ancestors did before us

Our brains are better at identifying immediate threats than abstract warnings for future events

We’re overconfident, commonly thinking: “This could never happen to me”

Read the article

My Interview with Brian Feroldi, Author & Youtuber

Brian Feroldi is the author of Why Does the Stock Market Go Up, a partner on Long-Term Mindset, a newsletter with more than 50,000 readers, and a Youtuber with over 65,000 subscribers.

Here are my two favorite questions from the interview:

Cole: What common mistake do you see most individual investors make?

Brian: They don’t think of their time frame first. Always start by asking, “when do I need this money?”

Cole: If you could give your 25-year-self one piece of advice about managing money, what would it be?

Brian: Focus on maximizing your income and savings rate, not your *rate of return.

Read the interview

*Rate of return is the gain or loss of an investment over a specific period of time.

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I have clients come in who make $750k a year with nothing to show for it

Some even have credit card debt, debt to the irs, etc

It’s why we always have to start with nailing down cash flow

Can’t build towards anything when you spend every dollar you earn

— Thomas Kopelman 💵 (@TKopelman)
Feb 16, 2023

Income is important, but it’s not everything.

Focus on your personal cash flow – how much money do you hold onto each year (saving or investing)?

Like Brian mentioned above, start by increasing your savings rate.

It’s not wrong or bad to use increased income to improve your life, but you must keep your savings rate consistent (or increase it).

High income may not last forever.

Thank you for reading! As always, feel free to email me with questions or comments. I respond to every email.

Enjoy your weekend.



New here? Check these out:

The Secrets of America’s Wealthy

Where to Begin

Mastering the Art of Spending Money

Disclaimer: This newsletter is for information and entertainment purposes only. I am not an investment or tax professional. 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).