Newsletter

Newsletter: A Little Status Spending Today Can Steal Your Wealth Tomorrow

read time 6 minutes

This Week at a Glance

• Have you ever spent money to show the world you’ve “made it?” Sure, a little splurge now and then won’t hurt. But spending to validate your success can derail your retirement and long-term plans. This week, I cover what you can do to avoid status consumption.
• US markets continued to post all-time highs this week. This positive market optimism comes as economic data, like the recent retail sales release, reflect slowing economic growth, underpinning the Fed’s likely rate cut later on this year.
• ICYMI – When can having too much in a Roth IRA be too much of a good thing? When it limits your options. That’s why last week, I covered the pitfalls of over-optimizing for tax-efficiency and discuss ways to maintain liquidity to help keep your options open.

Status Spending Today Can Steal Your Wealth Tomorrow

Have you ever gone out of your way to impress someone after making a lot of money?

Maybe it was right after you landed your first six-figure job.

Or maybe it was when your startup went public and transformed your seemingly worthless stock options into a life-changing windfall overnight.

If you have, in a way, it's like proving to the world that you finally "made it," right?

Well, these moments often remind me of stories about famous people who came from nothing, made a bunch of money and then got themselves in trouble.

Take Mike Tyson, for example.

Now, Tyson is a heavyweight boxer and was one of the highest-paid athletes during the peak of his career.

But, he ended up blowing his newfound wealth almost as quickly as he made it.

In fact, during the height of his spending, he famously purchased over 100 cars, he bought several million-dollar homes and he even bought a few Bengal tigers to go along with it all.

And so, you likely know where the story goes from here, right?

Because despite having earned over $400 million at the height of his career, Tyson ended up losing nearly all of it and went on to file for bankruptcy in 2003.

You know, Tyson's situation is a tragic rags to riches story.

That's because he had this desire to show the world that he finally made it, but in the end, he ended up nearly losing it all.

Now, as a first-gen high earner, have you ever felt compelled to show the world that you've finally "made it"?

Have you ever splurged on a brand-new luxury car or bought a home that was at the top of your budget?

Whatever your situation might be, it's crucial to remember that spending to keep up appearances now can derail your plans to leave a legacy for your family and hinder your ability to save for the long-term.

How to Avoid the Temptation to Show the World that You’ve Made It

That's why, as your windfalls come in, it's essential to clarify your values, set your priorities straight, and develop a touchstone to help keep your financial goals on track.

Because if you don't, your retirement plans might fall short, and you may not have much to show for it after all.

So then, here’s what you can do to avoid status consumption when the temptation arises:

Step #1: Define What's Essential

Defining what's truly essential in your life is about ensuring your money reflects your values.

This initial step sets the stage for every financial decision you'll make, ensuring your spending and saving behaviors align with what matters most to you.

Ask: "What are my core values, and how can these guide my financial decisions?"

Spend some time reflecting on moments that brought you the most joy. Write these down and identify the values at the heart of these experiences.

Then use this list as your financial compass.

Step #2: Crystallize Your Long-Term Vision

With your core values defined, it’s time to translate these into a tangible, long-term vision.

By being clear with your vision, you can ensure you’re aligning your money with real goals that lead to lasting results.

Ask: "How do I want to put my money to work in a way that honors what's essential to me?"

Consider how your core values shape your vision of a fulfilling life.

Then, write down specific long-term financial goals and outline actionable steps for how you’re going to achieve them.

Step #3: Create Your Touchstone

Finally, create a touchstone you can lean on when tempted by conspicuous consumption.

A touchstone is like a financial plan. It acts as a constant reminder and a guide that helps you stay true to your goals and avoid the pitfalls of status spending.

Ask: "Does this purchase support my values and help me achieve my long-term goals?"

When in doubt, consult your touchstone and review it before making important financial decisions.

Then, annually review your touchstone to ensure it still reflects your values and life goals.

What I’m Reading

We’re all busy in the daily rush of things. That’s why I’m sharing a list of articles that I’ve read this week to help you stay on top of your own financial independence journey.

I’ve consolidated all of these links here for your ease of viewing.

• When keeping up with the Joneses costs a fortune
• Spending as Social and Affective Coping
• Choosing Between Making Money and Doing What You Love
• Money and Impressions: A Fool’s Game
• Save yourself the stress of trying to impress

Thanks for taking a look!

---

by Peter Donisanu

Newsletter: Why Your Cash Reserves Matter More Than You Think

read and listen on fimastery.com

read time 7 minutes

This Week at a Glance

• You can't go bankrupt if your net worth rises, right? Maybe. While solvency risk falls as net worth rises, liquidity risk can cause a whole new set of challenges. This week, I cover how I set up a cash management strategy to mindfully put money to work and protect my lifestyle.
• The S&P 500 and Nasdaq 100 jumped to record highs on Wednesday, driven by a tech rally led by AI-darling Nvidia, and amid optimism that the Federal Reserve might lower interest rates later this year after a slightly weak ADP labor market report.
• Student loan debt is a burden that can hamper your kids lives for decades. And while you could pay cash out of pocket for school now, the fact is that costs are rising at an alarming pace. Last week, I discussed three things I'm doing now to help my kids avoid going into debt to pay for college.

Cash Management Isn’t Just About Emergencies, It’s About Freedom

Have you ever missed out on an opportunity because you didn’t have enough cash on hand to make it happen?

I know I have.

And you know for me, it happened when I was trying to buy a new home with my wife after relocating across the country, but our money was tied up in an investment property.

Now, this situation took place nearly a decade ago when our family relocated from the Bay Area to Saint Louis.

But, imagine yourself in our situation: We had just moved thousands of miles with two little babies in tow, with most all of our belongings now in storage and all we wanted to do was to find a place that we could call home.

Now, at the time, there were four of us cramped up in a tiny two-bedroom apartment because we wanted to take the time to scope out the right neighborhood to buy our perfect new home.

Well, needless to say, we were all biting at the bit to get settled into our final destination.

And so, I decided to put one of my rental units back in California up for sale so that I could raise the cash needed to fund this next purchase.

And by the time we were ready to go house shopping, I was confident that my rental would sell quickly. That’s because we had already accepted an active offer on the property, and closing appeared to be just weeks away.

So then, by this point, I felt confident enough to go out and do some home shopping without much concern about whether the timing was right or not.

But, the trouble was that I didn’t actually have the cash in hand that I needed to complete a purchase transaction.

Did that stop me? Of course not!

I mean, I felt so confident that we’d close on our sale that we even got to the point of finding our dream home, sitting down with our real estate agent, and starting the process of writing an offer on this seemingly perfect home.

Now, there and then, I could have written an earnest money check and signed that offer.

But, I knew that I was taking a big risk because the sale of my property back in California was still pending.

Well, fortunately for me, my good senses kicked in, and we decided to pass on this purchase.

It was disappointing, for sure.

But, fortunately for me and my family, we avoided a huge pitfall because my rental sale fell through just a few days later, and from there, it actually ended up taking another two months for the property to sell.

So then, the big lesson for me here was how being illiquid or dealing with the lack of access to cash, can delay or even derail some of our best-laid plans.

Have you ever found yourself in a similar situation?

Have you ever gone to make a big-ticket purchase, knowing you have the assets to fund it, but have found yourself facing a cash shortfall?

Here’s the thing: you may have a lot of wealth stored up in real estate, in your equity comp, a business venture, or even your retirement savings.

But, even as a high earner, missed opportunities, or worse yet, Murphy’s Law can often strike unexpectedly and catch you flatfooted.

How to Prepare Your Cash Management Strategy

That’s why it’s essential to focus on developing a cash management strategy that allows you to maintain a robust liquid cash reserve so you have access to your money when you need it.

Because without this financial buffer, you might be compelled to sell investments at the worst possible time, risk feeling financially insecure, and could even face delays in achieving your personal life goals.

Here's how I set up a cash management strategy to mindfully put money to work and protect my lifestyle:

Step #1: Set Up Your Cash Cushion

Creating a cash cushion involves calculating how much cash you need to have ready for household essentials in a pinch.

This fund will be your go-to in times of uneven cash flows and help smooth out periods of higher expenses or lower income.

Ask: "How much do I actually need to spend to keep the lights on?"

Review your bank statements from the last few months to identify your essential monthly spending rate.

Then, set aside 2-3 months' worth of your monthly burn rate in a dedicated bank savings account.

Step #2: Gear Up for the Big Stuff

While your cushion covers essentials, it's also crucial to prepare for big, unforeseen expenses.

These can include sudden home repairs, medical, or tax bills. Being prepared can help avoid selling long-term investments at inopportune times.

Ask: "What's the biggest surprise I could face this year, and how much would it likely cost?"

Create a list of large impactful expenses like a job layoff.

Then, set aside around 6-9 months of expenses in cash-equivalents like CDs or Treasuries to provide growth and accessibility.

Step #3: Tune Up Your Strategy

Life changes, and so should your cash management strategy.

By checking whether you're over-prepared or under-prepared, you can optimize your cash holdings to be responsive to life's changes without sacrificing your financial stability.

Ask: "Do I have the cash I need, when I need it?"

After a year, if you have too much sitting in bank savings, consider reallocating to cash-equivalents or vice versa.

Either way, these reviews help align your cash with life changes and prevent shortfalls or missed opportunities.

What I’m Reading

We’re all busy in the daily rush of things. That’s why I’m sharing a list of articles that I’ve read this week to help you stay on top of your own financial independence journey.

I’ve consolidated all of these links here for your ease of viewing.

• Don’t Confuse Budgets and Cash Flows
• How Family Offices Can Broaden their Risk Mindset in a Volatile Time
• The 3 Most Common Reasons Why People File Bankruptcy
• Emergency Funds Can Reduce Stress
• Why High Income Earners Go Broke: 5 Wealth Killers

Thanks for taking a look!

---

by Peter Donisanu

Newsletter: How to Save for College and Avoid Going into Debt

read and listen on fimastery.com

read time 6 minutes

This Week at a Glance

• Student loan debt is a burden that can hamper your kids lives for decades. And while you could pay cash out of pocket for school now, the fact is that costs are rising at an alarming pace. This week, I cover 3 things I'm doing now to help my kids avoid going into debt to pay for college.
• S. stocks sank in Wednesday’s trade as investors worried about a surge in US bond yields after a weak government debt auction. This stoked concerns that the Fed will keep rates higher for longer, especially as US consumer confidence unexpectedly rose in May.
• Have you ever been on the verge of a breakthrough but stepped back because of a setback? It’s that way with investing too. When the markets shake, it’s easier to think about quitting or searching for a magic pill rather than sticking it out. That’s why last week, I discussed why sticking to your plan, not panicking, is essential for long-term success.

Be Prepared, So Your Kids Can be Spared

Choosing to go to college was one of the best investments I've ever made.

Doing so not only opened doors for me, it also taught me how to become a lifelong learner.

Even so, my post-secondary education journey wasn't so smooth from the start.

You see, during my first two years in college, I was lost in this new world of higher learning.

And so, I found myself barely scraping by with a 2.0 GPA because I didn't have anyone to show me the ropes.

But, during my junior year, as I settled into my chosen business major, everything seemed to change.

School wasn't just about memorizing facts anymore.

No, it quickly became about understanding and applying the knowledge I was learning.

And so, for the first time, I saw the true power of education.

I saw how I could apply what I had learned at night school to my job in the morning, which allowed me to make incremental strides in my career.

So then, with this newfound motivation, by the time I finished grad school, I made the Dean's List and graduated with honors.

Quite the turnaround, right?

Well, it certainly was, but here's the kicker: because I’m a first-gen Romanian American, my family wasn’t familiar with the college system and we didn't know how to prepare or save for it.

So then, despite my academic success, when it was all said and done, I was left with a mountain of student loan debt.

Now, if you're a first-gen professional, then there's a good chance that you're starting to see yourself in my story.

Maybe you've struggled too, or perhaps you’ve wondered if traditional college is even worth saving for in a world ripe with self-learning opportunities.

Whatever your position may be, deep down, we all know how education can unlock incredible opportunities when applied in the right settings.

You know, when it comes down to it, most parents want to give their kids a head start in life.

And so, I know that if I'm serious about helping my kids get a leg up when it comes to their learning goals, then I need to help them finance their schooling without it becoming a burden to their future.

How to Save for College and Avoid Going into Debt

Indeed, if you're anything like me, then you'll likely want to consider options beyond paying cash out of pocket and begin funding a college savings plan, like a 529, sooner rather than later.

Because if you don't, your kids could be stuck making choices centered around getting out of debt instead of pursuing their life's purpose.

So then, even if you can afford to pay cash out of pocket now to fund your children’s college expenses, here are three things I’m doing to help my kids avoid going into student loan debt later on down the road:

Step #1: Understand Your Savings Target

Planning for college expenses enables you to properly estimate your future cash needs and avoid taking on debt to fund a savings shortfall.

Taking out the guesswork makes the daunting task of saving both manageable and measurable.

Ask: "What schools would my child attend, what are the current costs associated with these institutions and how many years do we have to save?"

Then, use online planning tools that factor in inflation and rising tuition fees to estimate your child's future education need.

Step #2: Select the Right Savings Vehicle

529s, education trusts, UTMAs, Coverdell…

Different vehicles come with distinct benefits and limitations.

Understanding these nuances can significantly impact how effectively you can save for and ultimately fund your child's education.

Ask: "What are my priorities for this education fund?"

If it's about maximizing tax-free growth, then a 529 plan might be worth considering.

If you want to have more of a say in how proceeds are used, consider an educational trust. Either way, find the right fit for you.

Step #3: Start Saving Immediately

The sooner you start saving, the more your money can compound over time.

Starting early also reduces the risk of taking on unnecessary debt and provides a buffer against market volatility and the rising cost of education.

Ask: "Can I start making regular gifts without significantly impacting my current lifestyle?"

Set up automatic contributions to your chosen plan as soon as possible. Even modest, regular savings can grow significantly over time, reducing your future need to borrow money.

What I’m Reading

We’re all busy in the daily rush of things. That’s why I’m sharing a list of articles that I’ve read this week to help you stay on top of your own financial independence journey.

I’ve consolidated all of these links here for your ease of viewing.

• The Cost of Private vs. Public Colleges
• The Types of Colleges: The Basics
• How Much Does College Cost?
• 9 Best Scholarship Websites And Search Engines
• 10 Steps to Minimize Student Loan Debt

Thanks for taking a look!

---

by Peter Donisanu

Newsletter: Why There’s No Such Thing as an Investing Magic Pill

read time 7 minutes

This Week at a Glance

• Have you ever been on the verge of a breakthrough but stepped back because of a setback? It’s that way with investing too. When the markets shake, it’s easier to think about quitting or searching for a magic pill rather than sticking it out. That’s why this week, I discuss why sticking to your plan, not panicking, is essential for long-term success.
• The S&P 500 and the Nasdaq retreated 0.3% and 0.2%, respectively from their record highs on Wednesday following the release of the latest FOMC minutes. Nevertheless, Thursday’s futures are poised for a sharp rebound following a better-than-expected earnings release from tech company NVIDIA.
• Using your wealth to buy back your time is one of the best things you can do for your well-being. But if you don’t approach hiring help in a mindful way, it could cost you. That’s why last week I covered three things I do to avoid hiring a bad fit for help around the house.

There’s No Such Thing as an Investing Magic Pill

Hi. I'm Peter. I'm a functional introvert, but I generally enjoy public speaking.

But it wasn't always this way.

You see, when I was a college freshman, I did what any reasonable person would do to get over their fear of speaking, and I signed up for a public speaking course.

What better way to get over your fear of speaking than to get up in front of 30 perfect strangers and say something, right?

Well, early on in this one particular class, I was paired up with a partner whom we'll call Ryan.

And, as part of our first public speaking assignment, Ryan and I were tasked with learning as much about one another as possible in fifteen short minutes.

From there, it was our job to introduce each other to the rest of the class.

So how'd I do?

Well, I took careful notes, and when it was our turn to present, I walked up to the front of the class and nailed my introduction.

I felt great!

Then, it was Ryan's turn.

But, Ryan's presentation didn't go as smoothly as I had anticipated.

That's because Ryan was more nervous than I was, and the coping mechanism for his nervousness turned out to be humor.

Now, have you ever met someone who, when they get nervous, they just start cracking jokes?

Well, unfortunately for me, to ease his tension, Ryan decided to use his budding sense of humor to make the class laugh, but at my expense.

In fact, Ryan was so nervous that he didn't even bother reading from his notecards.

The truth is that he just created a giant fictitious story about me simply to keep his schtick going.

And so, just a few days after that unfortunate event, I dropped the course and gave up on my public speaking pursuit for some time.

Now, it took me a while to get back up onto the public speaking horse after that situation.

But, had I been able to move past that one uncomfortable event…

Had I been able to look back at that one awkward circumstance and had just taken it for the learning experience that it was, I wouldn't have wasted so much time not improving my communication skills.

Now, have you ever been right on the cusp of achieving a goal, but walked away at the last minute because of a momentary setback?

You know, Thomas Edison was known to have said that, "Many of life's failures are people who did not realize how close they were to success when they gave up."

There isn’t a magic pill out there that will get you from where you are today, to where you want to be in the future.

Indeed, reaching for shortcuts, whether that's looking for the promise of a safe haven financial product or the promise of a risk-free investment home run, rarely leads to the outcome that we're hoping for.

How to Stick to the Plan, Not the Panic

That's why, when it comes to how you or I manage our wealth, it's crucial to stay committed to a disciplined long-term strategy, no matter what's going on in the markets.

So then, it's essential to develop a disciplined investment strategy, understand why you're investing in the first place, and then stick to the plan, not the panic.

Because if you don't, you not only risk financial loss, you may also end up introducing unnecessary stress and anxiety in your life, which could ultimately set you up for financial and personal setbacks.

Here are some of the steps I take when I’m tempted to deviate from my long-term plan:

Step #1: Review Your Investment Objective

An investment objective defines what you aim to achieve with your investments, like preserving your money, generating income, or growing your wealth.

By understanding your objective, you can make investment decisions based on your long-term life goals and not just short-term market trends.

Ask yourself: "Do I clearly understand my current investment objective, and does it truly reflect my financial goals and personal values?"

Take a second look at your investment policy statement (IPS). This document reflects your risk tolerance and timelines, asset allocation and investment constraints.

Step #2: Check for Investment Misalignment

Investment misalignment occurs when there's a discrepancy between your portfolio's current holdings and your IPS-defined asset allocation.

This could be due to changes in market conditions, life circumstances, or shifts in your long-term goals.

Ask yourself: "Is my current investment strategy and asset allocation still in line with my IPS?"

This step is key because misalignment can derail you from your financial destination, leading to inefficient asset growth or unnecessary risk exposure.

Conduct a thorough review of your portfolio. When necessary, rebalance your holdings so that you can reduce overallocated holdings, and add to underallocated positions.

Step #3: Stay the Course

It's tempting to want to go looking for a magic pill when your portfolio isn't performing the way you want it to.

But, staying the course is vital for achieving long-term financial success. It prevents knee-jerk reactions to market volatility, which can compromise the growth and security of your investments.

Ask yourself: "If I am considering a change to my investment strategy, is it because of market noise, or is it based on a well-thought-out plan?"

Staying the course means adhering to your investment strategy even when market conditions are uncertain. Unless your IPS needs to be adjusted to reflect life changes, stick to the plan, not the panic.

What I’m Reading

We’re all busy in the daily rush of things. That’s why I’m sharing a list of articles that I’ve read this week to help you stay on top of your own financial independence journey.

I’ve consolidated all of these links here for your ease of viewing.

• Are Annuities A Good Investments
• Market Timing: What It Is and How It Can Backfire
• Investment Strategies for the Long Term
• Ten Things to Consider Before You Make Investing Decisions
• Here are the Reasons these Investments are Bogus

Thanks for taking a look!

---

by Peter Donisanu

Newsletter: How to Effectively Buy Back Your Time

read time 7 minutes

This Week at a Glance

• Using your wealth to buy back your time is one of the best things you can do for your well-being. But if you don’t approach hiring help in a mindful way, it could cost you. That’s why this week I cover three things you can do to avoid hiring a bad fit for help around the house.
• Stocks in the US rallied Wednesday, with the S&P 500 breaking above 5,300 for the first time, and the Nasdaq 100 gaining 1.3% and hitting a new record high. April's CPI report showed that both headline and core annual inflation slowed, and retail sales unexpectedly stalled, bolstering expectations that the Fed might start cutting interest rates in September.
• I should have done something about it sooner. Don't let this be you when your company's stock value declines and you need the money. Last week I discussed steps you can take now to ensure you have a handle on your stock options, RSUs and stock held in your 401k ESOP.

Don't Pay the Price by Doing the Work Twice

Have you ever hired someone for help around the house, and you immediately regretted it?

You know, I've had my fair share of unhelpful helpers over the years.

In fact, I remember a time when I hired cleaners that didn't leave my house as clean as they promised.

You see, my family is pretty good about keeping our home tidy.

But, every once in a while, we'll hire someone to come out and take care of the deep cleaning we sometimes can't get to.

You know, it's the stuff like wiping down the baseboards, dusting in high places, cleaning the ovens, and otherwise getting into those deep nooks and crannies.

Well, one day, we needed help cleaning, and having recently moved to Pennsylvania, we were looking for a new crew.

And so, after doing our research online and calling around, three nice ladies showed up at our home one afternoon and offered to give us a "deep clean" for what seemed like a reasonable price.

Well, as they got to work, it immediately became clear that they wouldn't be able to get the job done in the time they had allotted for the work.

And how did I know this?

Well, they didn't have the same hustle or focus on their work as other professionals that we had hired in the past.

And wouldn't you know it, as soon as I left to pick up the kids from school, the crew took off.

And you know the biggest disappointment in all of this was that I could have done the work myself.

But, I just wanted to use my money to buy back some of my time so I could spend it with the family.

And because of this bad hire, I was left paying the price for the same work twice.

Have you ever found yourself in a similar situation?

Have you ever hired someone to help you out, but they didn't meet your expectations?

How to Effectively Buy Back Your Time

Well, having lived in different parts of the country and having hired plenty of contractors, here's one of the biggest lessons I learned when it comes to hiring help:

If you want to achieve your desired outcome and effectively buy back your time, then it's crucial to have a clear set of expectations and a personal definition of success for your project before you get started.

That's because having clarity not only prevents common pitfalls like cost overruns, unnecessary complications, and potential disappointments.

It also ensures that you can devote more of your time to what truly matters: like family, close relationships, and developing your passion pursuits.

So then, by clearly defining your success criteria and selecting help wisely, you'll be able to optimize the cost and quality of the service you receive.

But more importantly, by taking this approach you’re likely setting yourself up to effectively buy back more of your time in the future.

Here’s what you can do get the help you need:

Step #1: Clearly Define Your Success

Without a clear definition of success, the help you hire may not meet your expectations, and waste your time and money.

So then, defining success means identifying outcomes you expect from the project. It’s about focusing on the result rather than the process.

Ask: "What specific outcomes do I expect to see once the project is complete?"

Focus on the "what" rather than the "how." What do you want the individual or team you plan to hire to accomplish?

Then, make a list of clear, specific goals and be ready to clearly articulate this vision when you engage potential service providers.

Step #2: Hire for Outcomes, Not Cost

Hiring based on price alone often results in lower quality work.

Hiring for outcomes means ensuring that the quality of work aligns with your clearly defined goals from step one.

That’s why it’s crucial to know what you want as you’re interviewing.

Ask: "Is my intended hire truly committed to my defined outcomes?"

Consider whether they are willing to go the extra mile by asking your potential hire to describe how they’ll perform the work.

Pay attention to outcome-based language, rather than task-based language.

Step #3: Have a Backup Plan in Place

A backup plan is crucial because it allows you to be prepared for possible failures or letdowns in service delivery.

What you want is to ensure your contracts or agreements have clauses that address non-delivery, such as penalties, refunds, or exit strategies.

Ask: "How will this crew make the situation right if the work goes wrong?"

Look for specific solutions rather than vague assurances.

Before signing on the dotted line, review your service agreements, and ensure you have a clear exit strategy.

Then, act decisively if the work doesn’t meet your standards.

I talk more about this approach in this week’s post >>>

What I’m Reading

We’re all busy in the daily rush of things. That’s why I’m sharing a list of articles that I’ve read this week to help you stay on top of your own financial independence journey.

I’ve consolidated all of these links here for your ease of viewing.

• Hiring a Contractor Checklist and Tips
• Here are hiring tips to ensure your home is both tidy and secure.
• How to Avoid Getting Ripped Off by an Auto Mechanic
• Choosing and Instructing a Babysitter
• How To Hire A Landscaper: Checklist And Tips

Thanks for taking a look!

---

by Peter Donisanu

Newsletter: I Should Have Done Something About it Sooner

read time 7 minutes

This Week at a Glance

• I should have done something about it sooner. Don't let this be you when your company's stock value declines and you need the money. This week I’m covering three steps you can take now to ensure you have a handle on your stock options, RSUs and stock held in your 401k ESOP.
• Stocks bounced back this week but are trading choppy as earnings and rate uncertainty weigh on sentiment. While stocks have notched a string of gains in recent days, the rally lost some steam on Wednesday as the Fed’s Kashkari signaled that rates are likely to stay at historic highs for a while.
• How will you be remembered in 100 years? Will anyone remember who you are? And if they do, will it be how you want them to remember you? Because if you don't write your story, others will write it for you. That’s why last week I discussed three ways you can write your own story.

I Should Have Done Something About it Sooner

I should have done something about it sooner.

Have you ever taken a big bet and experienced a big loss?

Now, I'm not talking about going all-in on a Blackjack bet at the casino.

No, what I'm talking about is pouring your heart and soul into a professional role with the hope of a big payday.

It's the anticipation of giving your all to something bigger than yourself only to see it come to nothing.

Now, if you have, then you likely know that sinking feeling that you should have hedged your bets sooner.

Maybe you shouldn't have poured everything into that one big bet because you just watched it, and all your financial hopes and your life plans fade away with it.

But maybe you've been lucky.

Maybe you've made all the right moves and happened to be in just the right place at just the right time.

And so, you've likely found that one opportunity that moved you from one successful role to the next.

But, here's the thing: if you're like most of us, you'll likely one day come to know the Law of Unintended Consequences.

You'll likely learn firsthand what it means to experience a Black Swan event.

Or maybe, the universe will give you a quick lesson in Murphy's Law.

And in that moment, you'll truly experience the sinking feeling that maybe you shouldn't have put all of your eggs in one basket, that maybe you should have done something about it sooner.

Now, this point is especially true if your employer pays you with stock options, RSUs, or company stock paid into your retirement savings account.

Because here's the thing: Not having a plan for your concentrated stock holding, no matter how hard you've worked or how lucky you've been, could eventually set you up for disappointment.

How to Avoid Regret with Your Company Stock

Therefore, unless you have a plan for the stock you receive from your employer, whether that's a stock award or match in your 401k, you'll likely want to consider diversifying your concentrated holdings sooner rather than later.

Because if you don't, you could face unexpected financial costs, undue stress and anxiety, and a deeper challenge to your life and financial goals.

Here’s what you can do to avoid this outcome:

Step #1: Determine Your Timing Need

The first vital step in managing your concentrated holdings is understanding the timing of your savings needs.

This timing allows you to strategically decide whether to hold, sell, or diversify your stock based on your financial needs and goals.

Ask yourself: "What specific needs will my company stock fund, and when will I need the money?"

Then, write down your financial goals in order of need.

This will provide a roadmap for what to do next and help avoid regret when it comes to your company stock.

Step #2: Understand Your Vesting Schedule

A vesting schedule determines when you will fully own the stock awarded.

By mastering this schedule, you can better plan when these assets will be available and how to utilize them to meet your goals.

Ask yourself: "What are the key dates on my vesting schedule and how will they impact my financial plans?

Make a list of all vesting milestones related to your stock awards and retirement benefits.

Regularly revisiting this schedule will keep you prepared to make timely decisions.

Step #3: Align Your Selling Strategy

A selling strategy involves deciding the timing and quantity of stock sales based on your life goals regardless of market conditions.

This approach enables you to spread risk across various assets and hedge the risk of a single company's stock.

Ask yourself: "What is my ideal asset allocation, and how should my selling strategy adapt to meet this?

Begin outlining a detailed selling plan. Specify which portions of stock you might sell over time to align with your financial goals and risk tolerance.

I talk more about this approach in this week’s article >>>

What I’m Reading

We’re all busy in the daily rush of things. That’s why I’m sharing a list of articles that I’ve read this week to help you stay on top of your own financial independence journey.

I’ve consolidated all of these links here for your ease of viewing.

• Love Your Company Stock? Here’s What to Know.
• Having Too Much Employer Stock in Your 401(k) is Dangerous. Just Look at GE.
• Workers with Company Stock Might Have Too Much risk in Their Investment Portfolio
• Asset Allocation and Diversification
• Concentrated vs. Diversified Portfolios

Thanks for taking a look!

---

by Peter Donisanu

Newsletter: How Do You Want to be Remembered in 100 Years?

This Week at a Glance

• How will you be remembered in 100 years? Will anyone remember who you are? And if they do, will it be how you want them to remember you? Because if you don't write your story, others will write it for you. That’s why this week I’m discussing three ways you can write your own story.
• Markets breathed a sigh of relief on Wednesday and into Thursday’s open as Fed Chair Jay Powell stated during Wednesday’s post FOMC presser that “it is unlikely the next policy move will be a hike…" This sentiment came on the heels of higher than expected inflation and worries that the Fed’s rate pivot wont come as soon as some home.
• Are the markets keeping you up at night? Are you worried about all the bad things going on in the world right now? Truth is, I get nervous during times like these too. Last week, I covered three things I do to avoid sitting idly by when volatility picks up.

If You Don’t Write Your Story, Someone Else Will

How will I be remembered in 100 years?

You know, the older I get, the more I linger on this question.

And it's not because I'm intentionally looking for ways to gain notoriety.

Instead, I've come to realize that I only have a finite amount of time to get done what I was put on this earth to do.

The reality is that, over time, my priorities have changed.

You know, the motorcycle life that I once was so fond of in my youth is now long gone.

And today, when I think about working out, it's more about staving off heart disease than it is toning down my waistline.

But when it comes to how I want to be remembered, I'm reminded of a truly impactful quote that I recently came across that said, "In 100 years, no one will remember who you are."

It's shocking to think about, right?

In a way, I'm sure you likely already knew that intuitively.

I mean, can you remember your great-grandfather's name without looking it up or asking a relative?

I start getting depressed just thinking about it!

But here's the thing: instead of looking at this quote as being a cause for disappointment, I've used it as my inspiration to purposefully write my life's story.

You see, in 100 years, few people will care about what corporate title I earned, how much money I made, the square footage of my home, or all the toys I've owned.

But they'll likely be interested in my legacy, or rather, the story of what I did with my life.

Have you thought about your legacy lately?

Have you thought about what folks will say about you in 100 years?

And no, I'm not talking about the monetary inheritance that you could leave behind.

Instead, your legacy is the story that you want people to tell about you when you’re not here to tell it yourself

But here's the thing though: your legacy can only be as solid as the vision for the ideal world that you're trying to bring into reality in the right here and now.

It's something that you can make happen right now; it's not something that magically happens in the future.

How to Write Your Story

That's why, if you want to create a story worth remembering, then you need to prioritize daily activities that are aligned with your legacy-building vision.

Because if you don't, in 100 years, someone else will write your story.

Here’s how to start writing your own story:

Step #1: Identify Your Values

Writing your own story starts with knowing your values. Values represent what's essential now, not what you aspire to be.

Therefore, knowing what matters can shape your journey and enable you to create a legacy that reflects how you want to be remembered.

Ask: "Do I truly understand what's essential in my life, and if not, how can I find out?"

If you don't know where to start, try a values assessment or explore resources on values discovery.

Either way, aligning your actions with your core values is vital to writing your story.

Step #2: Practice Deathbed Meditation

Maranasati meditation, or deathbed meditation, can bring clarity, reduce anxiety over trivial matters, and emphasize what truly matters.

This awareness encourages living in the moment, valuing each day, and avoiding getting caught up in minor issues.

Ask: "In my final moments, who will I be surrounded by, and how will they remember me?"

Then, consider how your current path and values align. From there, set goals that bring you closer to your ideal vision and track these reflections for future guidance.

Step #3: Take Daily, Incremental Steps

Writing your story requires consistent, focused action. By taking intentional, daily steps toward your goals, you can write the story of your life and build a meaningful legacy.

Ask: "What do I need to do today to live in alignment with my values?"

Outline your vision and commit to one small step today that brings you closer to your goals. This consistent effort ensures progress toward building the legacy you dream of.

I talk more about this approach in this week’s article >>>

What I’m Reading

We’re all busy in the daily rush of things. That’s why I’m sharing a list of articles that I’ve read this week to help you stay on top of your own financial independence journey.

I’ve consolidated all of these links here for your ease of viewing.

• Hold On to Your Kids: Why Parents Need to Matter More Than Peers
• Setting Healthy Family Goals This Year
• 4 Questions to Answer When Creating a Family Vision Statement
• How to Choose Core Values for Your Family
• A Guide to Family Core Values

Thanks for taking a look!

---

by Peter Donisanu

Newsletter: Invest in Your Strategy, Not in the Headlines

read time 6 minutes

Welcome to the FI Mastery Journey, a weekly newsletter where you receive actionable ideas from me to help tame financial chaos, get your financial house in order and live your legacy.

Here’s how it works: each week, you’ll receive one article written by me. You’ll also get three simple questions that go along with the week’s article to help jog your mind and inspire you to take small, bite-sized financial wellness actions.

And, you’ll also get an inside look at the research I’m reading.

Follow along for one year and you will have completed all the work necessary to keep your financial house in order.

My goal in all of this work?

To provide you with the tools, resources, and insights to help you take one step closer to becoming the master of your own financial independence journey.

This Week at a Glance

• Are the markets keeping you up at night? Are you worried about all the bad things going on in the world right now? Truth is, I get nervous during times like these too. This week, I cover three things I do to avoid sitting idly by when volatility picks up.
• Benchmark S&P 500 closed higher in choppy trading on Wednesday, as investors weighed an uptick in Treasury yields amid positive corporate. However, Thursday’s weaker-than-expected US GDP report could support the market’s favorable expectations of a Fed rate cut later in the year.
• Windfall regret sucks. It’s that feeling of spending through a tax refund, bonus check or vested stock award with nothing to show for it. The good news is that you can avoid this outcome. Last week I shared a simple approach to securing your windfall and giving it a purpose.

Keep Calm and Trust Your Investment Plan

Is all the news coverage of the stock market selloff bumming you out?

I don't know about you, but I'm downright disappointed.

You know, markets have had a ripping good start to the year, and now it feels like it's all coming to an end, right?

In fact, in the first three months of the year, the S&P 500 index, one measure of stock market performance, had its best start to the year since the pandemic.

And this stellar performance comes after watching these markets ride a rollercoaster over the past few years, with prices seemingly flying to the moon and then dropping like bricks.

But now, after having a good run for the past six months, it feels like Mr. Market is once again pulling the carpet out from under us all.

It feels like we're all about to relive the uncertainty and ups and downs in the stock market that we did just a few years ago after finally getting back to even.

It's just not fair, is it?

Indeed, turn on financial news, and it's all right there: concerns about impending wars, political wranglings and upcoming elections, unabating inflation and all this ongoing interest rate policy uncertainty.

It's enough to make you want to build a bunker and hide away for the next decade!

Now, having felt the pain of watching markets sell off in 2022 and then having it take two years to bounce back only to potentially be right back at it again, I'd be tempted to pull my money out of the markets and wait for this storm out for the time being.

Do you feel the same way?

Are you tempted to throw in the towel and just sit all of this out so you can break even?

Well, if you are, then you should know that being under-allocated in the markets could leave you with a massive case of investor's remorse.

In other words, if you take your money out now, you could feel somewhat safe, sure.

But, you could also be left with a sinking feeling of disappointment a year from now.

You know, no one has a crystal ball to divine which one of today's headline events could lead markets to rally or falter next week, let alone next year.

How to Avoid Feeling Overwhelmed by the Headlines

So then, given everything going on, if you're tempted to pull money out of the markets, I'd encourage you to pay less attention to the headlines and more to your disciplined investment strategy.

That's because if you don't, you'll not only miss out on gains on the other side of all this bad news, you'll likely also throw your investing ability into question and potentially derail your long-term financial plans.

Here’s what to do instead:

Step #1: Rebalance Your Portfolio

Rebalancing your investments is crucial because it allows you to maintain control over your financial future.

This proactive approach ensures your investments align with your long-term goals despite market volatility.

Ask: "What is my current asset allocation, and how does it compare to my target allocation?

Act now to take a disciplined investing approach rather than reacting impulsively to the headlines.

Do this: sell overallocated investments and buy those that are underallocated.

Step #2: Prepare Your Sleep-well Number

Your sleep-well number should cover your living expenses or anticipated large expenditures for the next 12 to 18 months.

This approach is essential to maintain peace of mind and financial stability during uncertain times.

Ask: "Do I have enough cash reserves to handle my expenses during a market downturn?

Check your current liquid cash reserves and compare them to upcoming expenses. This proactive step ensures you are prepared for market

volatility without compromising your long-term goals.

Step #3: Trust Your Plan

An investment plan is designed to guide you through market ups and downs and capitalize on long-term market appreciation.

By sticking to your plan, you minimize impulsive reactions to short-term swings, which can derail your life goals.

Ask: "Do I fully understand all aspects of my investment plan?"

Turn off the financial news and focus on your plan.

Take the time to reevaluate your investment policy statement or understand market trends. When in doubt, stick to your plan.

I talk more about this approach in this week’s article >>>

What I’m Reading

We’re all busy in the daily rush of things. That’s why I’m sharing a list of articles that I’ve read this week to help you stay on top of your own financial independence journey.

I’ve consolidated all of these links here for your ease of viewing.

• Why Market Timing Doesn’t Work
• The Psychology of How to Stick to Your Goals
• Overthinking Your Money: Avoiding analysis paralysis
• 4 Steps to Get Over Investor Paralysis
• What Happens When You Fail at Market Timing

Thanks for taking a look!

---

by Peter Donisanu

Newsletter: Do This With Your Cash Windfall Before It’s Gone

read and listen on fimastery.com

read time 5 minutes

Welcome to the FI Mastery Journey, a weekly newsletter where you receive actionable ideas from me to help tame financial chaos, get your financial house in order and live your legacy.

Here’s how it works: each week, you’ll receive one article written by me. You’ll also get three simple questions that go along with the week’s article to help jog your mind and inspire you to take small, bite-sized financial wellness actions.

And, you’ll also get an inside look at the research I’m reading.

Follow along for one year and you will have completed all the work necessary to keep your financial house in order.

My goal in all of this work?

To provide you with the tools, resources, and insights to help you take one step closer to becoming the master of your own financial independence journey.

This Week at a Glance

• Windfall regret sucks. It’s that feeling of spending through a tax refund, bonus check or vested stock award with nothing to show for it. The good news is that you can avoid this outcome. This week I’m sharing a simple approach to securing your windfall and giving it a purpose.
• Volatility is back as US stocks experienced their longest losing streak this week since January. On Wednesday, equities fell for a fourth straight day, with the S&P 500 extending a drop from its all-time high to more than 4%. A strong first quarter rally coupled with geopolitics, rates, inflation and Fed hawkishness are giving traders reason for caution.
• Last year, the IRS owed $1.3 billion to people who had made tax filing mistakes. Don't be one of those people this year. Even if you've already filed your return, last week I discussed how taking a few short minutes to check for mistakes could save you thousands.

Windfalls are Waypoints, Not Endpoints

Have you ever suddenly come into a large sum of money, and just like that, it's gone?

Well, you're not alone.

That's because when I was a kid, I often made money by helping my dad at his auto body shop during the summer.

Now, for all of my toil, my father was kind enough to give me $50 for my trouble.

And, you know, back then $50 bucks was a lot of money.

And so, payday eventually came, and the night before, I'd lay in bed imagining all the things I could buy at the mall with what

seemed to me like a big windfall.

Now, this was years before I learned to put money away and save prudently for the future.

Even so, all I knew then was that I had money that was burning a hole in my pocket.

Sure enough, a few days after receiving my paycheck, I spent it on Mexican Hot Chocolates, Ice Cream, Soft Pretzels, arcade

games, and useless knickknacks from one mall store or another.

Just like that, in a day or so, fifty dollars was gone.

And to add insult to injury, I was left with shopper's remorse.

Maybe you've felt that way before too, right?

Well by that point, the excitement was gone, and I wished that I had done something more meaningful with my windfall, like buying a videogame or a book to keep me occupied throughout the summer.

Now, have you ever felt disappointed when the excitement from spending a windfall wears off?

Or maybe you've felt discouraged after spending through a tax refund, a bonus, or a vested stock award?

Either way, you likely know that not having a purpose for a financial windfall can open the door to frivolous spending, and hence, regret.

How to Avoid Windfall Regret

That's why, when you receive a windfall, you should create a plan for how that money will amplify your life goals.

Because if you don't, you'll likely impulsively spend it, leaving you with not only the guilt of overspending but also the conflict of letting down yourself and your loved ones.

Here’s how to do it:

Step #1: Plan to Move the Money

Whether it’s a tax refund, bonus, or vested stock award act quickly to secure these funds by moving them to a less accessible account. This step allows you to reflect and plan without the immediate pressure or temptation to misuse the funds.

Ask yourself: "What steps can I take to protect this money from regretful use?

Then, plan to immediately transfer any windfall into a trusted savings account as soon as you receive it. By acting quickly, you protect your future plans from being undermined by external pressures or fleeting desires.

Step #2: Revisit Your Long-term Savings Goals

It's essential to reevaluate your long-term savings goals following a windfall. That's because clear, well-defined goals ensure that how you use your windfall aligns with your life's ambitions and values.

Ask yourself: "Will my great-grandkids be proud of my money choice?"

Identify the key values, impacts, and support structures you want your wealth to facilitate. This approach not only structures your financial planning but also ensures that each step you take is intentional.

Step #3: Immediately Put Your Plan into Action

When you receive a windfall, immediate action is crucial. Don't wait for the money to burn a hole in your pocket. Take prompt action now by allocating your funds according to your predefined plan and goals.

Ask yourself: "Where can I apply the money today so that I'm not just waiting to act?"

Put your plan into play if you’ve already received your windfall. Start by moving your windfall to a safe account. Then, begin paying down debt or topping up savings according to its purpose.

I talk more about this approach in this week’s article >>>

And be sure to check out this one-page checklist for managing your windfall here >>>

What I’m Reading

We’re all busy in the daily rush of things. That’s why I’m sharing a list of articles that I’ve read this week to help you stay on top of your own financial independence journey.

I’ve consolidated all of these links here for your ease of viewing.

• The Curse of Mental Accounting
• The Surprising Link Between Guilt and Overspending: Does It Cause You To Waste Money?
• How to Get Over Spending Guilt
• Here’s Why Lottery Winners Go Broke
• Why Do 70 Percent of Lottery Winners End Up Bankrupt?

Thanks for taking a look!

---

by Peter Donisanu