~ archived since 2018 ~

60 DoD Week 6: Finances

May 6, 2018
41 upvotes

60 DoD Week 6: Finances

By failing to prepare, you are preparing to fail. – Ben Franklin

Having a financial plan is vitally important for a number of reasons. What do you think the greatest stressor in relationships is? The lack of sex your wife is giving you? Close one. It’s money., although your shaved balls might think otherwise.

So don’t you think having a plan is critical to fixing your well-being? You have a MAP to get in shape. Why don’t you have a plan for your finances.

This post might better well be served in personal finance, but screw it. I’m going to town. For the folks overseas, some of this content might be US-specific.

On Net Worth

In order to calculate your net worth, you need to take your assets, such as your checking account, savings, house, etc, and subtract your liabilities, your mortgage, credit card debts, and loans, and you’ll get your net worth.

This is a good time to be spreadsheet guy. But instead of counting how many ladies you are seeing or counting how many times you had sex, use Excel for its intended purpose.

Start calculating it annually, quarterly, monthly. Whatever frequency you feel like you need to get a handle on where your net worth is going. For myself, I do this quarterly, though I have my finger on the pulse pretty frequently.

On Budget

You want to get ahead? You have to operate on a budget. Know what you are spending, what you are saving, and where your money is going.

For me, I’ve got it set where it takes me about 7 minutes to log into the various accounts, take certain numbers like food spend and so forth, and plug those numbers into the Excel boxes. Plugging them in allows me to quickly project the next three months spend and where I’ll be. Some numbers are easy to find, like the fixed costs of mortgage and student loans. Some numbers you have to estimate or look up, like variable food costs and gas/electric. I do this about once a month. It doesn’t take long at all – just making sure I have good cash flow and sticking to my budget.

Take the time to do a detailed line item comparison. You should know exactly how much is going where. The real key though is STICKING TO YOUR BUDGET. You have to keep to it in order to meet your goals.

On Financial Literacy

It’s key to have a good understanding on financial literacy. You have to understand things such as what is the market, what is a stock, what is a bond, what is a dividend, what is a mutual fund, and so forth. You have to know what you are investing in. Take your financial knowledge and move it up. There are literally tons of free information out there. Start going to town. And for the advanced players, go learn the ins and outs of your brokerage firm’s website and trading platform – I mean really learn it, not just “Oh, here’s how I do a buy order on a stock.” Learn how to screen for stocks, mutual funds, and bonds effectively.

Side note – If you are in the US, I recommend joining AAII. I have gotten a great deal of value out of my membership to them. A number of HNW individuals I know recommended it to me, though I had joined and got the lifetime membership before I met them.

On Bogleheads

Personally, I’m a Boglehead. Jack Bogle, man, he was the Chad of passive investing. I believe that passive investing (indexing) long term beats active investing long term. So does Warren Buffet. All my research agrees with this from a long term standpoint.

I’m also a fan of creating an Investment Policy Statement

Boglehead Resources

https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_philosophy

https://www.bogleheads.org/wiki/What_the_experts_say_about_investing

https://www.bogleheads.org/wiki/The_twelve_pillars_of_wisdom / https://web.archive.org/web/20070304091730/http://www.vanguard.com/bogle_site/april272001.html

https://studentloanhero.com/featured/bogleheads-invest/

https://www.bogleheads.org/forum/index.php

I would highly encourage you to review these links and check out their philosophy on investing.

On Being a Contrarian

I’m also a fan of being a contrarian. Be greedy when others are fearful, and fearful when others are greedy. You see it with the Bitcoin bubble. You see it when the stock market goes up and down. Oh no, the market is going down… whatever shall we do?!? You stick to your guns. I’m not saying go catch a falling knife. I’m saying that you stick to your plan. There is opportunity when people are fearful, and caution is warranted when people are being greedy. You have to evaluate where we are in the economic cycle as well.

On a Cup of Starbucks and Retirement

You might have seen the example where someone buys a cup of Starbucks every day and then finds out that if they took that money and invested it toward their retirement, over the span of say 30 years they’ll have like an extra 200k. I have two comments on this. First, be frugal, but don’t deny yourself. Don’t let frugality control you. Second, don’t just focus on controlling the little changes like saving a cup of Starbucks every week, focus on the BIG areas. Focus on getting a new job that pays you an extra 40k per year. Focus on saving 100 bucks off your cable (1200 bucks saved per year). Focus on lowering your taxes. What I’m saying is focus on not just the small areas, but also make the bigger impact areas a higher priority. And stop drinking so much Starbucks – make it yourself. Grind the beans, for crying out loud.

On Automating

Automate your finances. Make it EASY for yourself to save money. Set up your automatic bill payments for your credit card, loans, mortgage, and bills. Take advantage of the modern tools nowadays for app/camera based check deposits. Have money taken out of your paycheck before you get it, whether it is for retirement or into a separate savings account, so you can accumulate a rainy day fund. I’ve automated as much as I can, with direct withdrawals taken out for mortgage, credit card payments, gas and electric, and for the other areas like telephone those are automatically paid from the credit card, which then is automatically paid from the checking account. Automating saves time, which is a critical resource.

On Buying a Car

Here’s your resources:

https://www.reddit.com/r/askcarsales/wiki/index

https://www.reddit.com/r/askcarsales/comments/19niva/car_buying_faqs/

https://www.reddit.com/r/askcarsales/comments/4j2okj/what_to_expect_from_your_dealership_visit/

https://www.reddit.com/r/askcarsales/comments/613jvn/askcarsales_faq_updated_march_2017/

http://fightingchance.com/ - I used these for private market research, and was worth every penny.

There’s a lot more here, but this should get you through the basics. Simply, knowledge is power. The more you know, the more power you have. If you don’t know every single line item that is going into your purchase, whether it is an accessory, taxes, that stupid coating that they try to sell you for $1000 but it’s really just worth $100, etc., then you’re not ready, and you’re more likely to be fleeced.

Just even walking into the dealership and observing other customers and their interactions with the car salesman, it’s like watching sheep. Don’t be a sheep. Be prepared. And be prepared to walk too. Cars are a commodity. You can buy the same car someplace else cheaper. Remember this – cars are a commodity, and there’s lots of dealers out there.

Side note – “But Steel, what about TrueCar? That seems awesome. I’ll just go in, get my TrueCar/Costco/KBB/XXX price and I won’t even have to do anything to get a great price.” Let me tell you this. Dealers would be HAPPY to sell you at the TrueCar price all day long. With proper preparation, you can negotiate a far better deal. Last time when preparing, I had a binder. That binder saved me over 9k. Cost me 5 bucks at the local pharmacy. Printed out all my info, was prepared as all get out, and had a prepared offer ready to go (I used my own sheet, not theirs). Be prepared, that’s what I’m saying. And don’t fall for the four square technique. I just chuckled at the different dealerships at how they try to pull that one. Hell, I went through YouTube and viewed a couple of videos on how car salesmen sell, so I had an understanding of their mentality and what they do. Be prepared.

Generally, there are five major parts for buying a car: Trading in your current car, buying your new car, buying options on a car (like that fancy heated steering-wheel), extended warranty, and financing. You should own every single area of this. As an example, when you are talking about trading in your current car, you should ALREADY have your price quote from CarMax in hand, as well as other offers from other dealers. You should know what your car is worth if it were to be sold (remember supply and demand – what is it really worth: what someone will buy it for). You should already have the KBB and Edmunds value of your used car. For your new car, you should have a breakdown of every single thing on it, including options, doc fees and ERT. For your fancy accessories, you should have the MSRP of these accessories, the actual cost of them buying (wholesale parts warehouse), and an estimate in your head on labor costs (cause parts don’t get installed by themselves). For your extended warranty, I would just say that there is a reason why this is one of the most profitable areas of a car dealership. If you simply must have an extended warranty for peace of mind, go find a wholesale warranty. Do your research. Don’t buy from the dealership. Most cars nowadays anyway are built quite well with high standards of quality control, so they’re not failing like they used to. On financing, make sure you set up your own financing before you walk in. It makes life much easier, as the car dealers get money on financing as well. If the dealership can beat your credit union, more power to them. It’s powerful as all get out when you walk in with a prewritten cashier’s check at a super low interest rate and you’re ready when they start asking you how you are going to pay for the car. “Well, I am preapproved for x amount (aka the full amount of the car), but I’d like to see what specials and discounts you have.”

It’s all about how much money you can save in each one of these areas.

Granted if you’re BETA BUCKS and your time is worth more than doing a bit of research, that’s fair. Some folk just walk in and buy a car right there with a minimum of haggling. That’s how much their time is worth to them, and I know a few people who are like this. I’m merely presenting an alternate approach. To me, it was worth the time to save more than a few thousands.

On Buying a House

For many people, a house is the largest purchase that they make in their lifetime. Many of you have already bought houses, so I won’t go into this in detail, but again, from The Millionaire Next Door – “If you’re not yet wealthy, but want to be someday, never purchase a home that requires a mortgage that is more than twice your household’s annual realized income.”

I see a lot of you going “Shit” after reading that.

On a Side Hustle

I didn’t even have to write anything, u/red-sfpplus already wrote an excellent post on this topic - https://www.reddit.com/r/marriedredpill/comments/7i7x4q/the_financial_hustle/

Learn from his example. And then buy the man a drink.

On What to Do First

"Successful Investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can't produce a baby in one month by getting nine women pregnant." - Warren Buffett

First of all, take stock of where you are. Figure out your net worth, and what you have and what you owe (and interest rates). I would say the first thing to do is to have a three to six month emergency fund. This can be done in conjunction with getting rid of high interest debt (such as credit card debt), however if and when you have an emergency, you’re going to need to tap into something.

Start your budgeting process. Know where your money is going. Fix it.

Most people don’t even have a thousand dollars in savings. Don’t be like that.

I would also note that the Personal Finance subreddit has this already diagrammed out in a flowchart in their wiki - https://i.imgur.com/lSoUQr2.png

On Giving Back

So you give back, right. Of course you do. But what I suggest is potentially setting up a charitable fund, so that you can maximize your charitable deduction annually. You can give a larger sum one year, and then less/none the following year – and maximize your deduction the first year. Something to consider. Plus then your charitable fund is invested, will grow with the market (remember you need a plan and asset allocation here as well), and the growth can be given to the charity as well, tax free. I’d recommend Vanguard, but really there are a number of places that do this.

On Habits of Millionaires

From the book The Millionaire Next Door, here are the characteristics of millionaires:

• They live well below their means

• They allocate their time, energy, and money efficiently, in ways conducive to building wealth.

• They believe that financial independence is more important than displaying high social status

• Their parents did not provide economic outpatient care.

• Their adult children are economically self-sufficient.

• They are proficient in targeting market opportunities.

• They chose the right occupation.

On Building Wealth

You want to build wealth? Don’t have a high consumption lifestyle! Think for a moment. How much money do you think it takes to maintain an upper-middle class lifestyle vs. how much money do you think it takes to maintain a middle-class/blue collar lifestyle? Bespoke suits. Luxury cars. Bigger house. More property taxes. And so forth. Think of all the stuff you have to purchase to keep up with the Joneses. Cost of cleaning. Cost of buying furniture for that fancy house. Etc.

“But Steel, I don’t care about the Joneses.” Sure you don’t. But your wife does. Watching that HGTV, picking out the stupid pillows that breed like rabbits in your house when you’re not looking. There’s something about a house that factors into the Female Social Matrix.

Frugality is the name of the game. Frugal being “behavior characterized by or reflecting economy in the use of resources.”

Don’t be wasteful. Don’t have a lifestyle marked by lavish spending and hyper consumption. You want to build wealth? Be frugal.

Most people will not become wealthy in one generation if they are married to people who are wasteful. You can’t accumulate wealth if one of you is a hyperconsumer.

On Offence vs. Defense

So you’re not beta bucks, you’re BETA BUCKS! You make it rain! Good for you. You play great offence. But how’s your defense? How’s your wealth accumulation? Are you spending like there’s no tomorrow? If you want to win the game, you have to play great offence AND defense.

Here’s some questions for you:

• Do you operate on an annual budget?

• Do you know how much you spend each year for food, clothing, and shelter?

• Do you have a clearly defined set of daily, weekly, monthly, annual, and lifetime goals?

• Do you spend a lot of time planning your financial future?

To build wealth, minimize your realized (taxable) income, and maximize your unrealized income (wealth/capital appreciation without a cash flow).

How do you become financially independent? You have to plan, and you have to sacrifice. You sacrifice today for financial independence tomorrow.

On Your Wife & Buy-In

As part of your plan and budgeting, once you have it all set, get buy-in from your wife. But do this not like you are seeking approval from mommy (aka you validation whore you), but matter of factly here is the plan, we are budgeting x amount for these areas. Here is our plan. Set out a vision.

On Financial Vision

Read it and weep - https://www.reddit.com/r/marriedredpill/comments/3fecgi/first_budget_discussion_leads_to_minor_meltdown/ctnya77/

“One rarely talked-about element of Married Game is a subtle thing known as Vision. Most husbands don’t appreciate what a strong DHV possessing Vision is, and they proceed unaware of the power it can add to their relationship. Most husbands do this because they don’t understand Vision, what it is and how it is manifested, much less the subtle but important role it holds. Let me explain: once upon a time I was working for a personnel agency, and one of my jobs was coaching our people on interviewing techniques. I learned a lot about the process as a result, from both the interviewer and the interviewee side. When it came to my clients who wanted high-quality employees with good technical skills – real talent – I learned the sorts of things that such high-demand technical people wanted in a company. Money, of course, and security and benefits. But beyond that gifted employees want to work for a company with a history, a good culture, and (most importantly) a Vision.

What is Vision? In this context Vision is a manifested idea of the future. Everyone wants to work for a company that’s changing the world and is doing so in a positive, pro-active way. No one wants to work for the company that’s floundering, desperate just to meet its next quarter’s goals. Vision is a generally-stated plan-of-action toward a distant but achievable goal, presented in an enticing enough manner to inspire. It’s short on details and long on generalizations. It’s reflective of inner beliefs, values, and judgments, an indication of character, foresight, and initiative. It should be bold, meaningful, and challenging.”

Now, this quote above is excellent. You need a vision for your life, but you also need a vision for your finances. What would your financial vision be? What does it look like to you? Create it, and then be ready to share that with your family.

On Love of Money

Remember folks, money itself is not the root of all evil. It’s the LOVE of money that causes the problem. When you are so driven to be a better beta bucks to get that coin, and start neglecting yourself, your relationships, etc… you’ve got problems. Money is just a tool in the toolbox. Use it, don’t let it use you. Don’t become a slave to money. Your life doesn’t consist of how many toys you have. And you can’t take it with you when you go.

On Insurance, or Lack Thereof

Would it surprise you most people are underinsured? Make sure that you have enough of the key five types of insurance: health, car, homeowners/renters, life, and disability. Preparing yourself for these situations can save you a lot of pain in the future. Also, make sure you get enough umbrella insurance. Typically they say have enough umbrella insurance to cover your net worth, but I recommend getting a bit more.

A quick note, practically, do not get whole life insurance. Get term insurance, and invest the difference in cost between whole life and term. You’ll be much better off. And yes, this is for 99.9% of situations. The remaining .1% of situations are when someone is really wealthy and there are estate and tax considerations. Aka for most of us, don’t worry about it.

And take care of your health, so you don’t get fat when you are older and have related medical problems. Put. The. Fork. Down.

On Assets and Liabilities, Rich Dad Poor Dad Edition

A number of you have read Rich Dad Poor Dad, and there’s controversy in it. I disagree with a number of items in there, but there is an interesting point in there about how he views assets and liabilities:

“You must know the difference between an asset and a liability, and buy assets. If you want to be rich, this is all you need to know. It is Rule No. 1. It is the only rule. This may sound absurdly simple, but most people have no idea how profound this rule is. Most people struggle financially because they do not know the difference between an asset and a liability.”

He has a simple, non-accounting definition - “An asset is something that puts money in my pocket. A liability is something that takes money out of my pocket.”

Buy assets. I like it. What is out there that you can buy that puts money in your pocket. Stocks. Bonds. Mutual Funds. Real Estate that produces Income. There are a ton of items.

You should also think about getting rid of your liabilities… the giant boat, the private jet, the cluster B horrible sex-depriving wife (you know who you are)… you get the idea.

On Disaster Recovery and Information Security

What were to happen if you were to croak, or your only laptop with all your financial data was stolen or destroyed in a fire along with all your financial papers (see, you should have gotten that fireproof safe)? Would you have a plan on what to do? Would your spouse? Your kids? I would suggest making a backup of your finances, statements, tax returns, and other important papers, and put that on an encrypted USB key with a password that you and your wife knows, and then storing that someplace secure. Note that you can do fancy stuff like cloud storage, and so forth – but you need to have a plan for the worst case scenario.

Additionally, make sure that you use two-factor authentication when you log into your banking accounts (if they have it), as well as don’t repeat your passwords for your financial accounts.

I would even suggest having a separate secured email for your banking accounts, and another one for your personal accounts that get those damn spam emails all the time.

Don’t be stupid with your financial accounts. Using the same password is stupid. Yeah, I’m talking to you.

On Practical Advice

Do get rid of high interest credit cards. If you’ve got a balance on your 29.99% APR credit card and are paying that interest every month, it’s in your best interest to eliminate that debt as soon as possible. You’re not going to get a 29.99% return in a month in the stock market (unless you take on excessive risk for that return, obviously). Try to transfer that balance to a promo 0% interest credit card, and work that down.

Don’t borrow from your 401k. You’re cutting out your future returns. Don’t make that 401k loan your emergency fund, but rather have a separate emergency fund.

Do use credit cards over debit cards, for a whole host of reasons (theft being the primary reason).

Do pay yourself first. Take out at least 10% of your paycheck before it hits your checking account, and start saving.

Don’t pay monthly or annual fees on checking accounts or savings accounts. You shouldn’t be paying a bank to store your money. They should be paying you for that privilege.

Do get solid credit cards that give outstanding rewards. Do your research. Get at least 2% cash back if you can. Shoot for 5% or more. For example, Discover allows you to get 5% cash back in certain categories, and then you can redeem $20 for a $25 gift card to a number of different vendors. Looks like you just got a 6.25% return.

There are plenty of other examples. Do you spend a boatload at Amazon? Get your 5% return. As an example – I get a 5% return on gas using a certain credit card. It’s unlimited throughout the year, and is redeemed as a statement credit, so I don’t have to worry about redemption. I have a certain Amex that I redeem at 4.6% points per dollar spent, plus a 2% general cash back card (some places don’t accept Amex). I could go even crazier, like getting the 3% on restaurants, or churning cards (and there are a lot of sites out there on how to churn successfully), but at some point, it’s not worth it.

Do realize that credit cards make it easy to buy things that you don’t need. Recognize that part of yourself that wants to overspend. Ask yourself, do you need whatever it is you are buying. Would it hurt more if you paid in cash rather than credit. Buying with credit encourages you to buy more than you can afford.

Do shop around for loans/services. I asked my bank what the best car loan they could give me – they said 2.99%. I asked my credit union, and they got me 1.49%. That’s a big difference in interest over the course of a loan. Generally due to how credit unions are structured (and their presence – mostly online), they will have better deals on certain loans than banks, depending on the product.

Don’t delay saving for retirement. Generally, you’ll want to be saving 15% or more of your income for retirement early on. If you don’t save early, the harder it will be.

Do try to simplify your finances. It makes it much more complicated if you chase after the best savings rate for your online bank, and then have many accounts all over the place. The 20 dollars that you get in interest is not worth the complexity and time (aka your most valuable resource) it takes to manage all that stuff.

Don’t use your HELOC unless you have to. I have a large HELOC, but I don’t use it. But who knows when I need access to a large sum of money. And don’t use it in lieu of your emergency fund. You need both.

Do some research into budgeting tools. There’s a lot of people on these threads that recommend YNAB. I personally haven’t used it, so I can’t recommend it one way or the other. I’m old school (and cheap thrifty – why would you pay for something if you can do it yourself). But definitely check those tools out – Mint, Personal Capital, YNAB, budgeting tools through your bank, etc. Also, if your credit card does an annual summary (like Amex does), make sure you look at it to get an idea on where you’re spending – it’s very helpful.

On Tips for Saving Money

There are a ton of ways you can save money. Go ahead and google “how can I save 1000”. Wait, I did that for you - https://www.google.com/search?q=how+can+I+save+1000

Take some time, call up your cell phone provider/cable provider and see what specials they have. There's a ton of things you can do to save money quickly.

On Too Much Money

Say you’re an ostrich farmer, and are flush with cash. You’re asking yourself, ok, so I’ve maxed out my 401k, I’ve maxed out my Traditional IRA and then backdoored it into a Roth IRA for tax diversification plus the benefits of a Roth. I’m contributing to a 529 plan for the kids. I looked into mega backdooring my Roth but darn it my employer doesn’t let me do that. I’m doing all of the tax advantaged things I can. I still have this extra 300k sitting around – what do I do with it?!? First world problems, amIrite. Again, this comes back to your plan. What’s the short term plan with this money. What’s the long term plan. What’s your risk tolerance. What assets can you invest in that fit in with your plan. You still have to manage your budget, even if you are a 1 percenter.

On the Best Investment and Most Important Resource

I’m a firm believer that the best investment is investing in yourself (and your family and kids), and your most important resource is not money, but time. Learn a skill. Go get a degree. Give your kids a head start. Help your wife accomplish a goal. Do what you can to save time. Money of course helps, but you know what happens when you teach a man to fish.

On Happiness

Is money linked to happiness? Yes, but only to a point - https://www.usatoday.com/story/money/nation-now/2018/02/26/does-money-equal-happiness-does-until-you-earn-much/374119002/ and https://www.usatoday.com/story/money/personalfinance/2016/12/09/key-money-happiness-may-how-you-spend/94308848/

Honestly, at some point, money just becomes a scoreboard. Money will give you security. It will remove a stressor in your life. It will remove fighting and stress in your relationship (about money, fool). It will allow you to do many things. But eventually, money won’t give you happiness. You have to figure that one out yourself. And of course there’s the joke about “Money can’t buy you happiness, but it can buy you a yacht big enough to pull up right alongside it.” – David Lee Roth.

On Money and Attraction

Money by itself will not make your wife’s panties wet. Keep that in mind. Having and getting money is basic adulting. Same with saving and managing it. You want to get her wet? Get in shape. Lift. Does money boost your status? Sure. Is status one of those areas that has some effect on where you are in the sexual marketplace? Sure. Pure physical attraction? No. Do you really think that making MORE money is going to have your wife give you more sex? Of course not - https://heartiste.wordpress.com/2014/06/02/money-wont-save-beta-males/

Get in shape. Be hawt. And fix your damn teeth so you can smile like you are a somebody.

On a Brief Story

So I was talking to a friend of mine, and I asked him how he and his wife set up the finances. He told me about this system, where his paycheck goes into his checking, his wife’s paycheck goes into his wife’s checking, and they have a joint savings account. Then he went into a convoluted description on how each of them pays certain bills, and how what he’s paying is not fair since he’s paying the mortgage AND property tax AND daycare, etc etc). I thought to myself, man, what a convoluted way to deal with stuff. They would then have multiple financial meetings, and discussion on who pays what, and all this extra stuff. It was just a lack of overall ownership going on.

Just take care of the finances. Figure out a system that works for you. I’m not going to tell you which system is the best, because it’s all dependent on your unique circumstances (example: heavy spender SAHM vs saver career girl, you’ll need to put some deep restrictions on the heavy spender). But own it.

On Who Owns the Finances

You own the finances. Period. End stop. From the prior post on finances, it’s so important that I’m putting it here again:

“At the core: Who do you want in charge of your financial future?

The person interested in maintaining status quo and safety at all costs with your happiness and satisfaction a secondary or minor consideration? Or you?

If you've learned anything here it's that you need to be a captain. Putting your wife in the family alpha role breeds contempt and most of the problems that brought your here. Besides control of sex, family MONEY decision veto power is the key indicator of who is wearing the pants.”

TheRedArchive is an archive of Red Pill content, including various subreddits and blogs. This post has been archived from the subreddit /r/MarriedRedPill.

/r/MarriedRedPill archive

Download the post

Want to save the post for offline use on your device? Choose one of the download options below:

Post Information
Comments

[–]SteelSharpensSteelMRP MODERATOR[S] 2 points3 points  (1 child) | Copy Link

On What to Read

Here are some suggestions on books and websites:

The Millionaire Next Door by Stanley and Danko - https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474

If You Can by William Bernstein - http://efficientfrontier.com/ef/0adhoc/2books.htm

Free version is here - https://www.dropbox.com/s/5tj8480ji58j00f/If%20You%20Can.pdf?dl=0

The Investor's Manifesto. Preparing for Prosperity, Armageddon, and Everything in Between by William Bernstein - https://www.amazon.com/Investors-Manifesto-Prosperity-Armageddon-Everything/dp/1118073762

The Bogleheads Guide to Investing - https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/1118921283

The Coffeehouse Investor - https://www.amazon.com/Coffeehouse-Investor-Wealth-Ignore-Street/dp/0976585707

The Bogleheads' Guide to Retirement Planning - https://www.amazon.com/Bogleheads-Guide-Retirement-Planning/dp/0470455578

The Four Pillars of Investing: Lessons for Building a Winning Portfolio by William Bernstein - https://www.amazon.com/Four-Pillars-Investing-Building-Portfolio/dp/0071747052/

Total Money Makeover by Dave Ramsey - https://www.amazon.com/Total-Money-Makeover-Classic-Financial/dp/1595555277

Personal Finance for Dummies by Eric Tyson - https://www.amazon.com/Personal-Finance-Dummies-Eric-Tyson/dp/1118117859

Investing for Dummies by Eric Tyson - https://www.amazon.com/Investing-Dummies-Eric-Tyson/dp/1119320690/

The Millionaire Real Estate Investor per red-sfplus’s post (can confirm this is excellent) - https://www.amazon.com/Millionaire-Real-Estate-Investor/dp/0071446370/

For all the M.Ds on here and HNW individuals, you might want to check out https://www.whitecoatinvestor.com/ and his blog – found it to be very useful.

https://www.irs.gov/ or your government’s tax page. If you’ve been reading, you know that millionaires know more than your average bear about the tax code.

https://www.reddit.com/r/TheRedPill/comments/7vohb3/money/

https://www.reddit.com/r/TheRedPill/comments/3hzcvn/financial_advice_from_a_financier/

https://www.artofmanliness.com/2017/09/22/4-money-tips-4-personal-finance-legends/

Personal Finance Flowchart from their wiki - https://i.imgur.com/lSoUQr2.png

Additional Lists of Books:

https://www.bogleheads.org/wiki/Books:_recommendations_and_reviews

https://www.whitecoatinvestor.com/books-4/

Subreddits

https://www.reddit.com/r/investing/

https://www.reddit.com/r/personalfinance/ - I would highly encourage you to spend a half hour browsing their wiki - https://www.reddit.com/r/personalfinance/wiki/index and investing advice - https://www.reddit.com/r/personalfinance/wiki/investing

https://www.reddit.com/r/financialindependence/

https://www.reddit.com/r/SecurityAnalysis/

https://www.reddit.com/r/finance/

https://www.reddit.com/r/portfolios/

https://www.reddit.com/r/Bogleheads/

MRP References

https://www.reddit.com/r/marriedredpill/comments/40whjy/finally_talked_to_my_wife_about_our_finances_it/

https://www.reddit.com/r/marriedredpill/comments/67nxdu/finances_with_a_sahm/

https://www.reddit.com/r/marriedredpill/comments/488pa0/60_dod_week_6_finances/ (original)

https://www.reddit.com/r/marriedredpill/comments/6a6712/60_dod_week_6_finances/ (year 2)

https://www.reddit.com/r/marriedredpill/comments/3xw015/how_to_prepare_for_a_talk_about_finances/

https://www.reddit.com/r/marriedredpill/comments/30z704/taking_back_the_finances/

https://www.reddit.com/r/marriedredpill/comments/2uzukg/married_redpill_finances_and_money/

https://www.reddit.com/r/marriedredpill/comments/3637q5/some_thoughts_on_mrp_and_finances/

https://www.reddit.com/r/askMRP/comments/8dwaqt/best_practices_for_finances_within_marriage/

https://www.reddit.com/r/marriedredpill/comments/588e5o/gain_control_of_the_treasury/

Final Thoughts

There are already a lot of high net worth individuals on these subs (if you don’t believe me, look at the OYS for the past few months). This should be a review for most folks. The key points stay the same – have a plan, get out of the hole you are in, have a budget, do the right moves for wealth accumulation. Lead your family in your finances. Own it.

What are YOU doing to own your finances? Give some examples below.

[–]SteelSharpensSteelMRP MODERATOR[S] 0 points1 point  (0 children) | Copy Link

A quick note, the two things I didn't cover were estate planning, aka get a will at the very minimum if you don't have one, and giving money to family - where the advice is never loan money to family, either make it a gift or don't give any at all, because money can divide families.

[–]SBIIISAHDs are the epitome of sex3 points4 points  (0 children) | Copy Link

Fuck. This is incredible. Thanks

[–]InChargeManMRP APPROVED3 points4 points  (4 children) | Copy Link

This is so good, thank you for your service!

Regarding Buying a New Car

With the internet it is now incredibly easy to get the best price possible with literally no stress and no negotiation. I've bought my last 4 cars this way, each time trying to beat my own record on door to door time. Currently it is 22 minutes.

Here are my steps:

0: Figure out your financing situation and when to buy. In the past I have paid cash and I've financed with the dealership. I know a lot of advice is to come in with your own financing, but whenever I've financed the dealership usually had attractive rates, in my case 0% as it was a manufacturer promotion. If you might finance with the manufacturer there is often a pre-approval process on the manufacturer's website. Fill this out, it will help to prevent the dealership from sneaking profit into the financing later on.

When to buy is a big part of it. Best times are at the end of a quarter, as often there are incentives for sales or other disincentives for holding inventory that will cycle/expire at the end of a quarter. End of the model year (around august) there also tends to be a lot of manufacturer incentives for prior model year vehicles. While major discounts can be had for end of model year, be cautious if you plan on reselling the car within 5 years. Even though it comes off the lot the same month that a next model year car might be sold, for resale purposes the model year of the car is all that matters, so potentially you can lose on resale by having a one year older car. For my last 3 cars two were purchased on 12/31 and one purchased on 3/31.

  1. Finding your ideal car is a different process than buying it. Completely decouple these in your mind. I'm not going to tell you how to find your ideal car, but ideally it would involve comparing options and eventually test-driving to verify that you actually like it. Avoid wanting more features than you really need. If you see a car you like it can be helpful to pretend you are interested and have the dealership create a full sales slip for you. For one it will be interesting to see what they want to charge, and two you will use this sales slip to help build your offers, since each state is different regarding taxes and fees.

  2. Create your own sales sheet in excel including ALL taxes, fees, etc. This varies by state, but if you have an old sales sheet for your last car you can use this.

  3. Using the manufacturer's website find all vehicles in your area that match what you want. color, options, etc. Likely there will be dozens in your area. If there are slight variations in options (and you are agnostic on that option) that is fine, include it in your list. In your spreadsheet make multiple copies of the sales sheet, one for each VIN.

  4. Using websites like edmunds look up the dealer costs (not MSRP) for each of the cars, be sure to pay attention to the dealer costs for accessories/options. Also look up the manufacturer holdback, this varies per manufacturer by percentage and on what portion of the cost. For example, one might be 2% of MSRP, another might be 3% of base price.

  5. Check on the available incentives from the manufacturer. Generally these are available at key buying times, they can be very valuable. Usually cash back is better than financing incentives, but you'll have to assess this based your situation. Remember that these incentives are from the manufacturer and have nothing to do with the dealership. I've seen so many people get screwed because they think they negotiated $2k off the MSRP. Lol, you dumb shit, the manufacturer incentive was $2,500, you paid $500 OVER MSRP.

  6. In your spreadsheet fill out the car price using the dealer cost minus the manufacturer hold-back and incentives. Show your calculations with line items for the hold-back, you are going to send this to the dealership later, you want them to know that you are on top of all costs and there is no room for negotiation.

  7. Depending on your state many dealership will add a ton of fees (profit) and tell you everybody has to pay it. Fuck that shit. In my state they love to charge "dealer fee", often pushing $800. In addition they will charge a "doc fee", usually around $200. They say "Yeah, it sucks, but everybody has to pay it, that's the law." What is interesting is that they are right, but not in a way that affects you. In my state it is illegal for them to charge different fees to different customers, so once they started their $800 dealer fee they can't change it, they have to charge you it. You know what you say? Tough shit, take it off the sales price. I will allow a small fee for document processing, there are some real costs there if they are processing a new license plate for you and other stuff. Allow no more than $100 for this. Adjust your pricing to reflect for recapturing those fees.

  8. Now you can finalize your sales slips. You should have determined their actual cost for the car. Now is the time for their profit. Some people are very adversarial with their dealerships, I do recognize that they deserve to make some profit. I usually go with $500 profit plus the $100 doc fee (mostly profit). Make their profit on the sale very clear in the spreadsheet. Finalize the sale with state taxes, tire fees, battery fees, title fees, whatever else is common in your state. Again, using an old sales slip will help find these. If you don't have that in step 1 you can pretend to be more serious of a buyer and ask for the full sales sheet for your review, then bring that home to use as a reference.

  9. Here is the fun part, now you should have a spreadsheet for each potential car with VIN numbers (very important) indicated as well as the dealership name and address in the heading. Print them to PDF, each their own file. Now you go to each local dealer website, find their internet sales email address, and send them an email titled: Immediate sale offer for VIN#NNNNNNNNN Purchase date: NN-NN-NNNN. Then in the email tell them you are purchasing a vehicle today and you have included your offer for their specific vehicle. "I have sent identical offers to 7 local dealerships. The first dealership to respond with an acceptance of my offer will have the sale. I'll be at the door within 1 hour of your response. Any response other than acceptance through email will be disregarded. Thank you!" Send this email early in the morning so it is the first thing they see when they get to work. Include your phone number, but next to it say (offer acceptance is only through email).

  10. You will most likely get an acceptance within an hour. Be sure that they are very clear they are accepting your offer. If they are not clear, respond in email that you need them to confirm they are accepting your offer as-is. Once they confirm this call them up, confirm verbally that they are accepting the offer as-is, and tell them to start prepping the car and you will be there within an hour. If you have external financing or are paying cash come with your check already written out. Be very matter of fact, if they try to pull anything you are out the door. If you don't get an acceptance that is ok. Do not respond to any email other than acceptance. Remember, you are not negotiating. If you respond it gives them power. If you don't respond (which is what you said you would do) they are negotiating with themselves. Eventually one will crack. In the off chance you don't get an acceptance it is possible that your profit was too low, maybe that is a very desirable car or something. I would probably try this a couple of times before adjusting my profit.

  11. Show up to the dealership, slap the pre-written check down on the table, (pre-written for price, not the dealership name) tell them "lets see if we can break some records for fastest sale". If they try to get you to change the price or pay more for anything the answer is no. If they keep pushing, you say "You accepted the offer as-is, I have your response right here in this printed email. Are we going to have a problem?" At the first sign of trouble walk out. I walked out on one of my car purchases when they tried to add back in some extra fee that wasn't part of my offer. I told them I was going to the second dealership that accepted my offer, good by. Before I hit the door their tune changed. If they come up with some other fee that wasn't in your sales sheet, tough shit, your check is written, they have to adjust the numbers to make it work. However it gets to the price on your check is not really your concern at this point. On my last car I had a trade in (also pre-negotiated this price, but I'm not going to get into that here, kbb is good). They ended up decreasing the trade-in price and increasing the car sale price, I guess it helped them for whatever numbers and incentives they need to hit. Whatever, it doesn't affect me, do what you want, my check is written.

  12. Enjoy your new car at a great price! On one of my cars the finance manager said he had never seen a car sell for so far under dealer cost, he went back to verify with the sales manager, lol. (remember, they have their secret manufacturer hold-back, so even though I was giving them $500 profit, we subtract out the manufacturer hold-back plus any bullshit fees you are negating).

[–]SteelSharpensSteelMRP MODERATOR[S] 1 point2 points  (3 children) | Copy Link

I'd like to add a bit more to this as well, and tie it into my most recent car buying experience. So my wife was driving a 12 year old vehicle that was on its last legs, and we needed to get that replaced.

Step one, finding out which vehicle you want. Keep in mind that even before you step on a car lot that there are forces at work influencing you. Millions of dollars of advertising for cars like Lexus (think Super Bowl ads) are spent trying to persuade your mind. You might want to look at J10's post that has a section on luxury brand marketing - https://www.reddit.com/r/marriedredpill/comments/374wln/what_we_talk_about_when_we_talk_about_dread_13/

Just be reminded that you are being influenced by external forces, and recognize those for what they are. Same thing with the dealerships. They're structured for influence as well. They want you to make that car buying experience a EMOTIONAL car buying experience. Tie it to emotion.

All right, so you've got your requirements in place. You know how many seats, the general type of car, all that good stuff. Start visiting dealerships and doing test drives. Your goal is to get the specifics on the EXACT car you or your wife want. You will be approached for the hard sell. That's fine. Don't buy yet, just get the specifics. I had a particularly long and painful time at one dealership that I leveraged successfully later.

Next step, the research. Get and print out your Truecar, KBB, and Edmunds values of the car. Truecar I believe if you click through a bit will show you the invoice price and other prices of accessories. Spend 20-30 minutes going through videos on Youtube. There's stuff that you should read, like this - https://www.findthebestcarprice.com/car-dealer-add-ons-extras/ . You've visited the car manufacturer's website, you've looked at all the deals. You've gone to that FC website I linked and spent the 30-50 bucks on research (money well spent). That will give you the invoice price, the holdback (typically 2% of the base sticker price), the market overview, the floorplan allowance (1.5%), the amount that the dealer gets when you give them all 10s on your dealer satisfaction survey, the matching advertisement charge (typically 1-2% of invoice), recommendations for wholesale warranty, cost of invoice vs retail, along with destination charge, the fact that putting nitrogen in tires is worthless (because oxygen is 78.084% nitrogen anyway), etc etc.

Some further tips: https://www.edmunds.com/car-buying/confessions-of-an-auto-finance-manager.phtml

Part 3: Lessons From the Other Side of the Desk

Over the years, I put together a checklist of advice for my friends and family when they were going to buy cars. In most cases, my advice was simply what not to do. If you follow these 10 "don'ts," you should get out of the F&I room unscathed:

  1. Don't agree to be a monthly payment buyer. If you do, you'll quickly lose control of negotiations and won't be able to see the real cost of the car.

  2. Don't buy a car without first checking pricing guides such as Edmunds.com's True Market Value (TMV®). Print out this information and take it with you to the dealership.

  3. Don't buy the extended warranty. The bumper-to-bumper warranty will last for at least three years or 36,000 miles. The powertrain warranty will then cover all the things that make the car go down the road, often for up to 75,000 miles.

  4. If you really want the extended warranty, don't buy it for the first price they offer. Markup is about 100 percent, so there is plenty of room for negotiating.

  5. Don't enter the F&I room unless you have independent financing or you have recently checked your credit report and investigated what interest rate your bank or credit union offers.

  6. Don't buy paint protection (it's basically just a wax job) or fabric protection or VIN etching. These add-ons are high-profit items for the dealership and you can buy them elsewhere if you decide you really want them.

  7. Don't pass up GAP insurance (the term stands for Guaranteed Auto Protection) if you're leasing, unless it's already in the contract. And buy GAP insurance if you are making a low down payment. Remember, though, that the cost for GAP is negotiable.

  8. Don't forget to run your monthly payment numbers using an online calculator to get a rough idea of what your car payment will be.

  9. Don't believe the F&I guy if he tells you that you have to buy the extended warranty to qualify for low- or no-interest financing. It's not true.

  10. Don't sign the contract because you "just want to get it over with." Take the time to verify all the essential numbers in the contract.

And - https://consumerist.com/2007/03/30/dealerships-rip-you-off-with-the-four-square-heres-how-to-beat-it/ and https://www.autocheatsheet.com/new-car/what-new-car-dealer-fees-should-you-pay.html for doc fee listing, but google your state specific.

All right, so you've called the dealerships, visited a few, found out the wholesale/retail cost for your options, secured your low interest financing, got your extended warranty costs, GAP insurance/auto insurance ready. You've called a few dealership and found out a few prices. All good stuff. So you're ready to go buy.

So I did this not on the last day of the month/quarter, but very close to it. Reason being is that a lot of dealers have people visit on the last day of the month, and they understand the score. I visited around mid-afternoon on a weekday, times were slow, and people were hungry to make a deal.

The first place I visited was with this smarmy guy with a Rolex and coiffed hair. The guy oozed insincerity. I came out with my offer, they were like we're not going below the TrueCar price. They didn't want to negotiate, so I left.

I was driving up to a second place when I decided to visit the one long painful dealer which was on my way to the second place. I figured, why not. I walk in, and am waiting to see who I can talk to. The sales folks were all talking with customers, so I'm waiting. I say, hey, if the sales manager is free, I'd like to talk to him for a bit. Sales manager comes out. I spoke with him some months back, and he remembered me. "Good to see you again." "Hello again. I was on my way to x dealership, and figured I would stop by. You see, I didn't have the best experience last time with x salesperson, but I figured that since you guys are close, it would be worth it to have a conversation before heading up to x." "Great, I'm happy to talk. And if we can't come to a deal, no worries, and we part as friends."

This guy was good.

So I bust out the binder. I say so according to your website you have x model with x options in stock. "Yes." "I'd like to make a offer for x model with xyz options." I pass over my paper. His eyes widen, but he controls his reaction a bit. Very smooth this guy. You don't get to be sales manager without paying your dues as the salesman.

He goes back, brings out the invoice. "Here's the invoice, minus hold back and floor plan." I say "And minus a few other fees as well." We add those down. I stick to my guns. We talk about stuff like customer survey, and that 10s are not a problem for the right price, as well as a bit of vague references to the incentives that are given for meeting sales quotas.

"Where's you get the info here?" "Private market research that I paid for." He just nodded after that, as I flipped through my binder.

I also use the line "You see, this is my wife's car. She does x. She takes her subordinates out to lunch. She'll be taking them out in this new vehicle. Who do you think she's going to recommend these people to go." Also, I mentioned service considerations. See, the sales manager sees all that stuff, and looks at the total profit to the dealership, including depreciation of the cars, service visits, and profit from the quarterly/yearly sales that they get back from the manufacturer. Go low.

So we come to a agreement on a very lowball offer, then we start talking about options. "I'd like to get x option." "Well, we can give it to you for $1100." "That's odd, the MSRP is this, your wholesale cost is this, and parts and labor is this - I think that we can go a bit lower that that." He talks to his service guy, who says $900. "Funny, at this other dealership they said that the cost for installation and price was $800." See, it pays being organized, expecially when you can quickly flip to what you want.

Long story short, I got great value for trade in (supply and demand, of course), they couldn't touch my financing, and overall I didn't get fleeced but rather got a great deal.

Afterward as I was leaving, the sales manager told me he wanted to burn my binder.

Also, for this:

On one of my cars the finance manager said he had never seen a car sell for so far under dealer cost, he went back to verify with the sales manager, lol.

This is the same as a woman saying "You're the best I've ever been with." - a nice ego boost, and may or not be true, but let's be real here.

I forgot to mention, get GAP insurance through your normal insurance provider, not at the dealership. It was like 30 bucks through the provider, and like 300 bucks at the dealership.

[–]InChargeManMRP APPROVED0 points1 point  (2 children) | Copy Link

I appreciate the follow up, although IMO that is far too much physically visiting locations and haggling. It is only a negotiation once you are both talking. STFU and frame apply here. I don't talk, I decide my offer and leave it in their hands. Your method is fine for you, but realistically a lot of guys are going to fold once they are in the hot seat, the dealership counts on this. I did it your way my first car, now I use the easy button (i.e. email and dealer FOMO).

This is the same as a woman saying "You're the best I've ever been with." - a nice ego boost, and may or not be true, but let's be real here.

I understand where you are coming from, but you're forgetting that the "money guy" at the end is not part of the sales team, there is no more selling at that point, just executing the sale. He DNGAF about making you feel good. They actually called the owner. He was like, dang, I better call somebody to verify this, I don't want to get in trouble.

[–]SteelSharpensSteelMRP MODERATOR[S] 0 points1 point  (1 child) | Copy Link

Yeah, there's a lot of patterns around this, the "email and phone attack", and I think in the Millionaire Next Door they detail a guy who used to work in the military and did this using faxes. It's good stuff.

And you're absolutely right. Many guys would fold. For me, I prefer the face to face, though email was another option.

Just tweaking your chain at the last comment. No harm no foul.

[–]InChargeManMRP APPROVED1 point2 points  (0 children) | Copy Link

It's all good.

Also, I didn't want to get too far in the weeds regarding floor plan. In general, you can see when a dealer received a particular car when doing the inventory searches on the manufacturer's website. The longer it has been sitting there the more they pay for it. The typical increments for rollover are 30 days. If you are comparing apples and you see that one dealership has the same car you want but it has been there for a couple months extra, that will likely be a juicy target. I've heard of people getting deals with basically no profit the day before the loan rolls over just so the dealer can avoid the loss.

[–]markpf731 point2 points  (1 child) | Copy Link

This is a very logical and complete resource for finances.

One aspect of money that was touched on but may be missed by some is the emotional aspect of money.

For some people (mostly females) emotion will impact the ability to decipher a need from a want. This relates to the spending addiction crowd. The only way I've successfully managed my wife's financial sabotage efforts is to keep the guardrails up and strictly enforce any bullshit overspending. She is a sneaky bitch with money. It's like living with a heroin addict who always wants to go on a bender and bring you with them. Fuck that shit.

And then there are those who hoard their money. This is the other end of the spectrum and equally as bad as an emotional spender. You operate rooted in fear with money. You will miss amazing opportunities in life be them social, investments, or a change of career.

Once you have knowledge of financial strategy and tools you should aim to be logical, unemotional, and have no fear.

The parallels between money and mRP are many - it is amoral, it should be unemotional, it is rooted in a logic, and you should operate from a realistic mindset of abundance based on your current reality.

[–]InChargeManMRP APPROVED1 point2 points  (0 children) | Copy Link

You operate rooted in fear with money

Good point. Money is a tool, no more, no less.

[–]rocknrollchuckMRP APPROVED1 point2 points  (2 children) | Copy Link

This is awesome.

For me, I’ve got it set where it takes me about 7 minutes to log into the various accounts, take certain numbers like food spend and so forth, and plug those numbers into the Excel boxes.

Care to share your spreadsheet format?

[–]SteelSharpensSteelMRP MODERATOR[S] 1 point2 points  (1 child) | Copy Link

Honestly, because of all those accounting classes, I structured my spreadsheet like a income statement and balance sheet, and then put projections under that. It's formatted so I can quickly copy and paste the left side of it into Outlook, and send it to me and my wife via email for a quick review.

I've put in links to quickly go to the specific banking websites for ease of use, and basically boxes that you put in your current balances, e.g. checking account 1, checking account 2, savings account, brokerage account, wife's retirement, my retirement, etc etc. Once you have all of that, you calculate your current net worth, then move to projections for the next 3 months. Generally, you know what your after tax paychecks will be, and I've got boxes to estimate expenses (such as gas is more expensive in winter, for example). Just have it flow that way.

[–]rocknrollchuckMRP APPROVED1 point2 points  (0 children) | Copy Link

Ok thanks!

[–]johneyapocalypseTold Death to Fuck Off - MRP is easy mode1 point2 points  (1 child) | Copy Link

Really fantastic post steel. I see only a couple omissions regarding estate planning and living wills.

On the business side of insurance - especially for those small business owners and the self-employed - professional liability, E&O, keyman, and a few others are worth including as well.

[–]SteelSharpensSteelMRP MODERATOR[S] 0 points1 point  (0 children) | Copy Link

It would be good if you or someone else posted about estate planning, wills, trusts, living wills, and powers of attorney. That’s a important topic that should be covered, and isn’t really my specialty (I just listen to my attorney).

[–]Agent008t0 points1 point  (1 child) | Copy Link

How do you buy a cheap house while living near your job that pays good money and near good schools, with decent neighbours so that your kids can make decent friends?

That doesn't seem possible.

[–]SteelSharpensSteelMRP MODERATOR[S] 0 points1 point  (0 children) | Copy Link

Don’t limit your thinking here. I’ve done it (had to remodel the entire house, and bust my butt doing it). I’m sure plenty of others have here as well.

You can kill a man, but you can't kill an idea.

© TheRedArchive 2023. All rights reserved.
created by /u/dream-hunter