Newsletter: Why I’m More Grateful than Thankful this Holiday Season

read time 9 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

This week’s I’m sharing with you three reasons why I’m more grateful than thankful as I reflect on the past year. Not sure what the difference is? Read on to get an idea of what I’m talking about here.
The big story in this holiday shortened week has been the drama and intrigue surrounding OpenAI’s CEO ouster. Whether you’re following the news or not, you likely may have missed the fact that risk assets are within striking distance of their 12-month highs…
ICYMI – Last week we discussed emergency funds, and when it might make sense for high earners like you to evaluate a more optimal use of your cash savings. You can read more about topic here.

FI Mastery Website is Back Up

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Why I’m More Grateful than Thankful this Holiday Season

I sometimes wonder if the settlers who first landed in America in 1620, with whom we celebrate Thanksgiving this week, likely felt more gratitude than thankfulness.

That's because, as you'll likely recall, these folks endured a rollercoaster of emotions in those first few months when they touched down on Cape Cod.

Indeed, to say that these pilgrims and settlers were unprepared when they first landed in what's now Provincetown is likely an understatement.

You see, when the settlers originally set sail from Plymouth, England in 1620, a confluence of events pushed back the travelers' departure date, leaving them precious little time to prepare for a brutal New England winter upon arrival.

Remember, they only packed so much food on Mayflower, and by the time they arrived in the New World, most of the food they could have foraged had already withered away as the seasons changed.

So then, with food running low and disease spreading, of the roughly 130 passengers and crew, nearly half the folks aboard the Mayflower died in those first few months, with some accounts suggesting that, at their lowest point, only a handful of people were healthy enough to care for the sick.

Now, could you imagine the feelings of despair that these people felt as they huddled up on this ship, likely waiting their turn to die?

But here's where the story turns good: despite their suffering, as spring approached, the settlers' fate changed dramatically, and they eventually went on to found one of the most prosperous colonies in America.

Now, much of their change in circumstances had to do with their chance encounter with a Native American known as Tisquantum, who we've come to know as Squanto.

It's worth noting that Tisquantum had already learned to speak English and understood the settlers' customs after being taken to Europe years before by other traders.

And so, we all know that Tisquantum showed the settlers how to plant corn, how to fish, and how to hunt and trap in the local terrain.

So then, as the crops came in that first year, and the settlers sat back and reflected on their bountiful harvest, can you imagine the gratitude these individuals must have felt for running into Squanto who wanted to help them, of all people, out?

Imagine the gratitude that they must have felt knowing that, had they landed anywhere else, they could have landed square in the sights of a hostile Native American tribe capable of easily wiping them out.

And how much gratitude must that colony have felt following the formation of an alliance with the Wampanoag tribe to fend off hostilities from other nations?

You know, in a way, the pilgrims and settlers stared into the abyss and endured hardship in those first few months but miraculously came through on the other side ready to fulfill their mission.

Thankful?

No doubt.

But I'd like to believe that, as the Pilgrims, settlers, and their Wampanoag friends settled in after their abundant harvest in November 1621, they looked back with a sense of deep gratitude for all they had endured, and a set of chance encounters that enabled them to fulfill their destiny.

Gratitude for 2023

Certainly, the settlers were thankful that, with the help of their Native Americans friends, they were well-prepared to endure another harsh New England winter.

But more importantly, it's hard not to believe that, after having experienced chaos, heartbreak, and what must have felt like impending failure of their project, the colonists likely felt an overwhelming sense of gratitude knowing that their experiment still had hope.

Now, as we gather with friends and family this week, we have the opportunity to take stock and, after offering our thanks for what we have, express our own gratitude for coming through multiple periods of what seemed like our own descent into the abyss this year.

To be sure, while today is an appropriate time to give thanks for the good things that happened this year, it's also a time for deep reflection and gratitude.

Here are three things that I'm grateful for this year:

Why I’m Grateful for the US Financial System

First, I'm thankful for a banking crisis that was halted in its tracks. Now, you'll likely recall that in early spring, the failure of Silicon Valley Bank led to failures among some other mid-sized banks and sparked concerns that rising interest rates could lead to a banking crisis the likes of which we had not seen since 2008.

Fortunately, this worst-case scenario did not materialize.

And while it's true that the assets held by banks that failed this year have surpassed levels last seen during the Global Financial Crisis, quick acting by policymakers, investors, and other larger banks arguably helped to fend off a larger cascade of lack of confidence selling.

Ultimately, had a similar situation taken place in any other country, I'm not so sure that financial markets would have been as resilient as they were to the uncertain developments in the US earlier this year.

That's why I am grateful for the privilege of living in America, a first-world country that, with all its blemishes, did not see a flight of capital this year and retains the position of the preeminent investment destination in the world.

Why I’m Grateful for Higher Interest Rates

Another development that I'm grateful for is the fact that inflation is finally beginning to show signs of cooling.

Now, make no mistake, prices for many of the goods and services we consume are still higher than they were three years ago. But the fact is that the rate of those price changes is starting to slow by some key measures, albeit at an uneven pace.

For example, energy prices this year are largely flat, while the pace of food price inflation fell to a two-year in October. In fact, according to data from the IMF (International Monetary Fund), energy prices on a global scale are actually in the decline this year.

And these moves come as prices of other key goods, like homes and autos, are finally showing signs of cooling nationally.

Now, it's worth remembering that these moves come on the heels of some of the most aggressive rate hikes we've seen from the Federal Reserve in some time, which suggests that higher borrowing costs are finally putting the damper on some excesses in the US economy.

Are we out of the woods yet? It's too soon to tell.

Indeed, time will tell whether slowing inflation is here to stay, but for now, I'm grateful for the fact that higher interest rates have arguably done some good after causing so much damage, and potentially, finally, setting the stage for a sustained Fed Pivot rally two years after it started.

Why I’m Grateful for a Return to Normalcy

Finally, I am grateful for a year in which it seems like we're finally turning a corner away from firefighting and crisis intervention and towards the return of normalcy.

Certainly, the potential for a broader military conflict involving the US in Europe, the Middle East, and Asia is enough to keep most people up at night.

But, the truth is that, while these conflicts loom large over our heads, for the first time in three years, our family finally attended school events, travel, vacations, and other public excursions without even thinking about the pandemic.

And while our household has been dealing with one bug or virus literally every other week since the kids went back to school in August, we are grateful that we've been able to manage symptoms with over-the-counter medicines without worrying about whether our being ill could turn into a broader health complication.

Being Grateful vs. Being Thankful

You know, when I sit and reflect on everything we've been through over the past few years, especially living many days not knowing what was coming next, finally being able to see the light at the end of the tunnel this year is something that I'm not just thankful for, but I'm genuinely grateful for.

Indeed, when it comes down to it, gratitude often goes deeper than simply saying “thanks.” It's often an outward expression of genuine appreciation for the people and the circumstances in our lives.

And, as Melody Beattie puts it, "Gratitude turns what we have into enough, and more. It turns denial into acceptance, chaos into order, confusion into clarity...it makes sense of our past, brings peace for today, and creates a vision for tomorrow."

So then, as you gather with your loved ones and give thanks this holiday season, be sure to take the time to dig deep and consider what you have to be grateful for this year.

To be sure, this practice is not just about recognizing good things that have happened but, involves a deeper appreciation that permeates your attitude and approach to life, which ultimately enables you to take one step closer to becoming the master of own your financial independence journey.

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 me stay on top of my own financial independence journey.

Update: I’ve curated these links in one easy-to-use page, which can be accessed via the link below for your viewing pleasure:

Why I Sold Our Target Date Retirement Funds
How To Talk About Money Without Stressing Yourself Out
Do Hard Things if You Want an Easy Life
Why indexing and private markets are considered to be the biggest disrupters of the past 50 years
A Few Laws of Getting Rich

Access all the article links here >>>

Thanks for taking a look,

by Peter Donisanu, ChFC®, AIF®

Newsletter: Is it Time to Rethink Your Emergency Fund?

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.

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

Everyone knows that an emergency savings fund can help mitigate unexpected life events. The downside for high earners is that you could be sitting on a lot of cash that isn’t doing anything for you. That’s why in this week’s post, we discuss ways to optimize your approach to emergency savings.
October headline inflation data came in softer than expected this week and markets rallied. Why? Because investors are now hopeful that with inflation cooling, the Fed could start cutting interest rates, maybe as soon as mid-2024.
ICYMI – The holiday season is a time of giving, and not receiving, right? Well, if you’re struggling with figuring out how and to whom to give, then be sure to check out last week’s post on how to create a giving strategy. Here you’ll learn how gifting, philanthropic giving and effective altruism all require different levels of time and resources.

Do You Still Need an Emergency Fund?

At what point is an emergency fund no longer necessary for your financial situation?

Never, right?

Because common sense tells us that everyone needs an emergency saving fund.

Indeed, you've likely heard how crucial it is to have money set aside as your first step in building a solid financial plan.

But the fact is that for some, an emergency fund in the traditional sense tends to make less sense as a household earns more money and accumulates more assets.

Now, make no mistake, for many families, a well-funded savings account can make the difference between staying solvent and falling into a tight financial predicament.

But with that said, a time likely will come for high-earning individuals and families when having any more than a few months' worth of living expenses in your bank savings account just doesn't make sense anymore.

To be sure, when it comes down to it, a dedicated emergency fund may have served its purpose early on in your career. But now, as your station in life has become more favorable, you'll likely need to take a more tailored approach to mitigating financial risks.

Ultimately, as your income and net worth rise, following generic financial advice will likely lead to suboptimal outcomes for your cash savings.

How to Evaluate Whether You Need a Cash Management Plan

That's why having a cash management plan in place and transferring financial risks to suit your unique financial situation is crucial to making the most of your money.

Here’s what you can do to evaluate whether evolving beyond your emergency fund is the right move for you:

Step 1: Reassess the Role of Your Emergency Fund

Take a deep dive into your financial assets and evaluate the real need for your emergency fund.

Ask: Given my unique financial position, do I genuinely need an emergency fund as large as I currently have?

By knowing your true liquidity needs and reevaluating your emergency fund, you can possibly free up significant funds that could be better allocated for optimized returns.

Step 2: Design Your Personalized Cash Management Plan

Distribute your savings among various savings and investing vehicles in a way that maximizes growth opportunities while ensuring liquidity for unexpected needs.

Ask: How can I strike a balance between having liquid cash for emergencies and ensuring my money is working for me?

Creating a cash management plan ensures your savings are actively adapting to your needs, rather than sitting idly by and missing out on potential growth.

Step 3: Transfer Your Financial Risks

Analyze your current insurance coverages and weigh the cost-benefit of paying premiums to transfer potential financial risks versus self-funding them.

Ask: Given my high earnings and assets, what is the real cost of transferring potential financial setbacks I might face by buying more insurance coverage?

By transferring financial risks at minimal cost, you can gain peace of mind knowing that you are protected from unforeseen losses.

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 me stay on top of my own financial independence journey.

You can find links to these articles in the daily feed at app.fimastery.com

The Magic Loop – A Framework for Rapid Career Growth
Why Now is the Time
How to Stop Wasting Time and Money on the Impossible
Core Inflation Hits Two-Year Low
China’s Xi Jinping in US for Tense Biden Summit

Thanks for taking a look,

by Peter Donisanu, ChFC®, AIF®

Newsletter: How to Give More Effectively with a Strategy

read and listen on fimastery.com

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.

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

With the holiday season just around the corner, this week we’re diving into the topic of creating a giving strategy. We’ll discuss the difference between gifting, philanthropy and effective altruism. Ultimately, giving this holiday season should match your level of commitment with causes that are essential to you.
Bond yields are lower and stock prices are higher this week with the S&P 500 rising around 6% from the start of the month. Market participants are breathing a sigh of relief following Fed Chair Jay Powell’s recent dovish comments. With that said, inflationary concerns linger and markets are not quite out of the woods yet.
ICYMI – There’s a lot going on in the world to be worried about at the moment. That’s why in last week’s note, we wrote about how famed investor Benjamin Graham developed a disciplined strategy that allowed him to weather a stock market crash, the Great Depression and World War II.

Use a Giving Strategy to Help Causes You Care About

Giving is hard because, according to some of the data out there, there are well over one million registered non-profits globally.

Even so, if you're like me, the holidays serve as a reminder about how crucial it is to focus on giving rather than receiving.

So then, with all the choices available to you, who exactly are you supposed to give your money to in the first place?

Like, which one is the best pick, right? It's enough to put you into a state of analysis paralysis.

Now, make no mistake, this lack of action isn't because of a shortage of red cans, street performers, or local charity adverts asking for money this time of the year.

Yet still, for many of us, the big question is, "where do I start with so many options out there?"

Now, if you have a genuine desire to give wisely this holiday season, but don't know where to start, then the good news is that you can achieve this end by approaching charitable giving with a clear understanding of your motivations, commitment level, and a well-defined strategy.

How to Create a Giving Strategy

To be sure, by approaching this giving season with a predefined game plan, you can not only ensure that your contributions make a meaningful and lasting difference, it will also help you achieve peace of mind knowing that your time, talent, and treasures are being used effectively to bring about positive change in the world around you.

Here’s how to start:

Step 1: Define Your "Why" for Giving

Before diving into the specifics of your financial action plan, deeply reflect on your personal motivation for giving.

Ask: What are the causes or challenges that deeply resonate with me, and how do they align with my vision for a better society?

Understanding your "why" serves as the base for your giving strategy and ensures that it is purpose-driven, making it more personally fulfilling.

Step 2: Determine Your Commitment Level

Decide how you want to give, whether it's through simple gifting, long-term philanthropy, or the analytical approach of effective altruism.

Ask: How much of your time, talent, and treasures are you willing to dedicate to your chosen causes?

By identifying your level of commitment, you can tailor your giving strategy to fit your personal resources and make a meaningful contribution that aligns with your capabilities.

Step 3: Research and Choose Your Giving Platforms

Use reputable platforms like Charity Navigator and GiveWell to inform your decisions and help identify organizations that align with your goals.

Ask: Which organizations or initiatives match my "why" and have a proven track record of effectiveness and transparency?

Tapping into the knowledge and research provided by these platforms ensures that your resources make the desired impact that you want.

Continue reading 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 me stay on top of my own financial independence journey.

You can find links to these articles in the daily feed at app.fimastery.com

The paradox of the “perfect life”
Even for High Earners Debt is Crushing
A Big Financial Myth
The Art of Keeping it Simple
Tomorrow is not Your Friend

Thanks for taking a look,

by Peter Donisanu, ChFC®, AIF®

Newsletter: What Benjamin Graham Can Teach Us About Investing when the World is Falling Apart

read time 7 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.

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

Turn on the news or social, and there’s a lot to be worried about, right? That’s why this week we’re going back in time to learn from an renowned investor who lived through the events leading up to WW2, and how we can apply those lessons today.
Fed Chair Jay Powell signaled that the central bank may be done with rate hikes during yesterday’s post-FOMC presser. If inflation continues to moderate and economic activity slows, history suggests that policymakers could start cutting rates in 6-12 months.
ICYMI – last week we discussed the difference between “living” your legacy and “leaving” a legacy. This topic is worth a read (blog) or listen (podcast) if you’re interested in leaving your heirs with more than an pile of cash and no instruction manual.

Disciplined Investing when the World is Falling Apart

Lately, it feels like we're staring into an abyss that makes even the most seasoned investors want to get out of the markets.

It feels like there's a lot that's going wrong with the world right now, and many things are quickly coming to a head.

That's because, among many developments, the Middle East has once again become a flashpoint for geopolitical tensions.

Now, conflict in the Middle East is nothing new for the seasoned investor.

In fact, these uncertainties have largely become a typical part of the investing narrative for the past few decades.

But with that said, something FEELS different.

And now this change in sentiment comes as the US is at risk of being pulled into another regional conflict as it supports its close ally Israel.

Now, on any other day, this latest military ramp-up likely would be just another typical day in the region.

But things are different now than where they were over two decades ago.

That’s because the US is already fighting a proxy war with Russia in Ukraine, while the potential for a conflict with China in the Taiwan Strait increasingly feels less like a matter of "if" and more of "when."

And why does this matter?

Well, such an outcome could potentially leave our country exposed to three simultaneous theaters of war at a time when trust in the media, trust in our politicians, and, most importantly, trust in our neighbors and our communities is plumbing all-time lows.

In many ways, it feels like we're staring into the abyss of calamity that's coming at us from all directions and society appears to be coming undone at the seams.

So then, what should an investor do at such a time of instability and uncertainty?

Should you move to the sidelines and wait until things settle down before risking more of your hard-earned wealth in this market?

Well, the simple answer here is a resounding "no."

In fact, while things feel different, they also appear eerily familiar.

How to Be a Disciplined Investor

That’s why one of the greatest investing minds who lived through the Roaring 20’s, the Great Depression and World War 2, Benjamin Graham, likely would argue that now is the time to strap yourself in and focus on cultivating the mindset of a disciplined investor.

Here are some of his suggestions:

Step #1: Cultivate a Margin of Safety

During these times of uncertainty, it’s essential to prioritize maintaining a financial cushion to weather market and economic uncertainties. Graham advocated maintaining a margin of safety in investing, that can be applied to your finances as well.

Ask: How much liquidity do I need to free up in the coming months to fortify my financial situation against potential uncertainties?

By adopting a margin of safety in your finances, you ensure that you have a buffer against unexpected hardships, allowing you to weather economic storms with more resilience and peace of mind.

Step #2: Don't Get Swayed by Mr. Market

Graham observed the manic-depressive nature of Mr. Market and advocated for staying consistent in your financial plan, regardless of external noise or pressures.

Ask: When uncertainties rise, am I making financial decisions based on research and understanding or am I being influenced by the erratic emotions of the market or financial media?

By not getting swayed by the daily fluctuations and days’ sentiments, you ensure that your financial decisions are grounded in a long-term perspectives, protecting you from knee-jerk reactions and unnecessary losses.

Step #3: Concentrate on What's Within Your Control

Finally, Graham advocated that you focus your energy on actions and decisions that are directly within your sphere of influence.

Ask: What aspects of my financial life can I control and improve upon, rather than stressing about global events that are beyond my grasp?

By centering your attention on areas where you can make a tangible impact, you enhance your financial well-being while ensuring that you're proactive in areas that matter most while avoiding unnecessary stress from external factors.

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 me stay on top of my own financial independence journey.

You can find links to these articles in the daily feed at app.fimastery.com

The Paradox of the Perfect Life
Yields Surge as New Regime Plays Out
European Central Bank Pauses as Inflation Drops Markedly
Rules for Lifestyle Creep: Live Beneath Your Assets
Markets Have Suffered A Sea Change
Where Americans Find Meaning

Thanks for taking a look,

Peter Donisanu

by Peter Donisanu, ChFC®, AIF®

Newsletter: What Kind of Legacy Are You Living Right Now?

read time 7 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.

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

Legacy planning isn’t just for the ultra-wealthy. The choices you make today can impact generations for years to come. Read or listen to this month’s post to learn how you can use your money to make a lasting impact.
Data out this week showed that the US economy expanded at a 4.9% annualized rate in the third quarter, besting economist estimates. What does this mean? A strong economy likely means stubbornly high inflation which means higher interest rates.
ICYMI – Many wealthy individuals get rich by taking big bets. While such approaches can help you accelerate your path to financial independence, it can also expose you to catastrophic losses. That’s why I’m advocating for taking a prudent approach to speculative investing.

How to Avoid Leaving a Failed Legacy

What comes to mind when you hear the phrase "leaving a legacy?" Well, when it comes to money, you might think about the ins-and-outs of estate plans, right?

Well, the truth is that that's just one side of the big picture.

You see, too often, many of us get caught up in thinking about WHAT our money can do after we're gone instead of HOW the ones we care about might actually use our wealth.

Indeed, legacy planning centered solely around money is simply a passive strategy built on the hope that your beneficiaries will take your pile of cash and hopefully do something good with it one day.

So then, what can you do if you truly want to use your money to make a dent in the universe?

Well, you can start by actively using your wealth today to intentionally form and cultivate relationships that last the test of time.

In other words, you can begin by "living your legacy" instead of planning to "leave a legacy."

And why's that important?

Well, that's because cultivating healthy relationships is a key determinant of our emotional well-being. Ultimately, genuine connections, shared experiences, and mutual understanding form the core of enduring legacies.

In essence, a legacy built solely on cash can easily vanish, but one grounded in meaningful relationships stands the test of time.

You know, every day offers an opportunity to shape your legacy. And so, you can start today by cultivating healthy relationships, giving your money purpose, and laying the foundation for future wealth appreciation.

How to Live a Lasting Legacy

So then, as you’re thinking about how you can make your mark on future generations, don’t wait until you’re taking your final breaths. Start today with a few simple steps to live your legacy:

Step #1: Combine Money and Relationships Right Now to Create a Lasting Legacy

Start by reflecting on even the smallest relationships you have and their importance in your life.

Ask Yourself: How can I use my wealth to strengthen and enhance these vital relationships?

By combining your money with human connection, you build a legacy now that is rich in both material and emotional value. It becomes a testament to your priorities and a symbol of the memories you cherish.

Step #2: Focus Your Wealth as a Tool for Positive Impact

Find ways to focus a portion of your assets to intentionally be allocated to experiential and educational endeavors.

Ask Yourself: What shared experiences can I invest today in that would leave a meaningful mark? And what small financial commitments can I make now to shortcut the learning of future generations?

Money, when channeled into avenues like education or shared experiences, amplifies its value manifold. It not only creates immediate impact but also seeds change that can span generations.

Step #3: Plan, Document, and Guide Your Legacy

Dedicate time to strategically plan a vision for your legacy, ensuring it remains resilient and aligns with your values.

Ask Yourself: How can I structure, document, and guide my legacy so that it not only represents my life's work but also offers a roadmap for those to come?

A meticulously planned and documented legacy acts as a guiding light for future generations. Through strategic structures, trusts, and foundational work, you ensure that your legacy stays solid and continues to reflect your values, wishes, and intentions for years down the road.

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 me stay on top of my own financial independence journey.

You can find links to these articles in the daily feed at app.fimastery.com

US GDP Grew at 4.9%
The Real Estate Hustle Con That’s Wrecking the Housing Market
Peak Rates – Are we there yet?
You Probably Need Less Money Than You Think for Retirement
How Your Personality Shapes Your Portfolio

Thanks for taking a look,

Peter Donisanu

by Peter Donisanu, ChFC®, AIF®

Newsletter: Do You Have What it Takes to be a Market Speculator?

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.

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

Check out this week’s topic on how to be a prudent market speculator. You know, if you’re going to take big market bets outside of your tradition investment strategy, at the very least check out some prudent steps to take beforehand.
Rising bond yields: The yield on 10-year US Treasuries is rising to its highest level since before the global financial crisis. This matters because borrowing costs, like mortgages, are tied to this rate. Higher interest rates likely will make it harder for the US economy to simply hum along in the months ahead.
ICYMI – be sure to check out last week’s post on how walking away from a job that’s not a good fit can boost your bottom line. This is worthwhile read because it’s a hot topic that’s come up in many of my conversations this month.

A Playbook for the Prudent Speculator

Being a prudent speculator is like trying to "act natural", or being "clearly confused", or listening to the "deafening silence".

They're all things that typically don't go together.

Even so, it is possible to become a prudent speculator if you approach it the right way.

And why would you want to be a speculative investor?

Certainly, don't we all know that disciplined investing is the surefire way to achieving and maintaining financial independence?

Well, let's face it: For many of you out there, taking big bets is what's allowed you to achieve the level of success in your career or business that you're living today.

Indeed, you know all too well what it feels like to go all-in on yourself, and to see those efforts rewa\rded in many multiples of your initial time and financial outlay.

Now, while it's true that you've likely experienced some big professional wins in the past, a common mistake that many high achievers make is to extrapolate expertise in one domain by trying their hand at trying to beat the markets.

And you know, all too often, this move rarely works.

That's because, all it takes is one wrong move in the markets, and you could see your years of hard work wiped out in short order, which is why a disciplined investment strategy works for the long-term.

Even so, if you're going to try your hand at speculative investing, there is a way to have your cake and eat it too, so long as you approach this act from a place of self-knowledge, order, and prudence.

How to Be a Prudent Speculator

So then, here are some steps to take to ensure that you’re ready for speculating with your savings:

Step #1: Evaluate Whether You Have What it Takes to be a Speculator

To engage in what can be a highly volatile financial endeavor, you’ll likely need to prepare emotionally for the highs and lows of speculative investing by examining past reactions to high-risk scenarios.

Ask yourself: Are I equipped mentally to handle sudden market downturns and significant investment losses, especially when operating outside of my long-term disciplined investment strategy?

By understanding your emotional responses to high-risk situations and familiarizing yourself with past speculative failures, you can approach speculative investing with a more informed, level-headed mindset, potentially preventing hasty decisions driven by panic or greed.

Step #2: Prioritize Financial Foundations Before Getting in too Deep

Here you’ll want to ensure that you have a strong financial safety net before venturing into the turbulent waters of speculative investing.

Ask yourself: Do I have a solid cash management process that covers my emergency savings, debt service, and continued retirement savings, to sustain me when capital is locked up?

By prioritizing a secure financial foundation and strategically using cash windfalls, you mitigate risks and reduce the impact of potential drawdowns/lockups, allowing you to approach speculative investing with a safety buffer and long-term perspective in mind.

Step #3: Adopt a Gambler’s Mindset and Become a Risk Manager

To do this, you’ll need to recognize the inherent uncertainties of speculative investments and use tools and strategies to manage those risks effectively.

Ask yourself: Do I have a clear strategy for my speculative venture, from position sizing to exit plans, and am I equipped with the right tools and resources to navigate the volatile world of speculative investing?

By incorporating robust risk management practices, understanding the importance of position sizing, defining exit strategies, and adopting a gambler's risk-assessment mindset, you can participate in speculative investing with a higher degree of safety, discipline, and potential success.

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 me stay on top of my own financial independence journey.

You can find links to these articles in the daily feed at app.fimastery.com

US Yield Curve Disinverts as Markets Reprice Bond Risks
Your Memory is Lying to You
Lessons from History from Three Generations of Currency Crises
How Awe Can Change our Lives for the Better
90/90 Minimalism Rule

Thanks for taking a look,

Peter Donisanu

by Peter Donisanu, ChFC®, AIF®

Newsletter: Ambition Pays: How Moving Roles Can Boost Your Bottom Line

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.

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

Check out this week’s topic on how to leave a job that’s no longer a fit. Even if you love your job, or are no longer in the job market, there might be someone in your life that could benefit from these insights.
Last week’s terror attack in Israel has likely changed the market calculus on geopolitical risks. Check out the Analyst’s Corner for insights into how this recent event could influence market risk appetite in the weeks to come.
ICYMI – be sure to check out last week’s post on turning market losses into tax gains. With only a few weeks left in 2023, this topic is essential for paying Uncle Sam no more than necessary on your taxable investments.

Why You Should Walk Away from a Less than Ideal Work Environment

What is the biggest career mistake that many high earning individuals make?

They stay in a job far past its expiration date.

And why is moving on from a bad job so hard to do?

Because leaving means change.

And let's face it, few of us like change.

Especially when it means giving up on all the time and effort you've poured into a situation or simply anticipating the uncomfortable feeling of the unknown.

But you know what?

The truth is that walking away to take a job with more attractive benefits is not only good for you, it can also help keep you out of trouble.

How so?

Well, there's the obvious fact that moving on can open the door to new possibilities and, as we discussed recently, can help you fast-track your way to financial independence.

More crucially, however, the truth is that moving on from an unproductive situation can help you avoid missed opportunities at best and disasters at worst.

But you know, when it comes down to it, walking away from an unfavorable work environment can help you avoid a potentially stalled or derailed career, a lifetime earnings shortfall, and even a long-term negative impact on your health and relationships.

Now, you might think, "this is all easier said than done," right?

Well, here's the thing.

It's one thing to know when to walk away from a bad situation and another to take that leap into the unknown.

Your Career: How to Walk Away from a Bad Fit

That's why taking the time to assess the costs of staying comfortable, understanding what could be holding you back from exploring career opportunities, and knowing which next steps to take can help ease your transition into an unpredictable and yet likely rewarding future.

Step #1: Acknowledge What’s Holding You Back

First, acknowledge the emotional factors that may be keeping you anchored to a less than ideal job situation.

Ask yourself: Are my feelings about my current role driven more by genuine satisfaction or fear of the unknown?

By separating immediate emotional reactions from deeper analytical thought, you can make more informed, rational decisions about whether to stay in or leave a job, ensuring your actions align with your long-term personal and career objectives.

Step #2: Assess the True Costs of Remaining in a Static Role

Periodically examine your current position for its impact on your career trajectory, financial prospects, and emotional well-being.

Ask yourself: Am I advancing professionally, earning what I’m worth, and feeling genuinely fulfilled in my current position?

Recognizing the potential downsides of staying too long in a stagnant role, from missed professional development to capped earning potential and emotional tolls, can help you make proactive decisions that enhance your overall life satisfaction and career potential.

Step #3: Proactively Prepare for the Next Chapter in Your Career

You can do this by staying actively engaged in your professional community, periodically checking in on your job satisfaction, and seek guidance when contemplating a career move.

Ask yourself: Have I set clear professional goals and am I taking steps to ensure that my current path aligns with them?

By continually reevaluating your career satisfaction, expanding your professional network, and seeking mentorship or advice, you can effectively position yourself to seize new opportunities and transition smoothly when the time is right, ensuring your actions are always in line with your broader life goals.

Read the full article 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 me stay on top of my own financial independence journey.

You can find links to these articles in the daily feed at app.fimastery.com

Israel-Hamas War Brings Geopolitical Risks to the Forefront
Lessons from History from Three Generations of Currency Crises
90/90 Minimalism Rule
Americans Say These 3 Things Define Wealth – None of them Require Making a Lot of Money
5 Books About Retirement that will Prepare You for Your Golden Years

Thanks for taking a look,

Peter Donisanu

by Peter Donisanu, ChFC®, AIF®

Newsletter: How Smart Investors Profit from Tax Loss Harvesting

read time 7 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.

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.

Read the article here >>>

This Week at a Glance

As we approach the end of the year, now is a great time to review your portfolio to profit from tax losses. More on that below.
The US just narrowly avoided a government shutdown, but we’re not out of the woods yet. Check out the Analyst’s Corner (here) for a cool chart on market returns and personally curated research on what a shutdown might mean to the markets and your portfolio.
ICYMI – be sure to check out last week’s post on managing your new money like old money. The big takeaway: there are specific steps to take if you want to wealth to last beyond your grandchildren.

How Smart Investors Profit from Tax Loss Harvesting

It's that time of the year again, and apple picking and pumpkin patches not only usher in traditional fall routines, they also signal that it's time for an annual review of potential tax losses you can harvest from your investment portfolio.

And you know, just as farmers come together to bring in the fall harvest before winter kicks in, prudent investors should take the time to review their portfolios for opportunities to harvest tax losses this season.

Now, for some of you out there, the idea of "harvesting" losses might seem counterintuitive.

That's because when we think of harvests, we tend to think of taking gains, not losses, right?

Well, while this point may be relevant in most situations, the truth is that a harvest can also happen when you act to avoid leaving money on the table.

Indeed, the key to growing and preserving your wealth isn't just about how much you make, it's also how much you keep.

That's why, just as farmers harvest their crops to reap the benefits of their sewing efforts, investors "harvest" losses to minimize tax expenses.

And so, by realizing (or "harvesting") losses, you can offset taxable gains elsewhere in your portfolio and avoid paying Uncle Sam any more than his fair share.

With that said, this process isn't just about selling all your losses. Indeed, it involves making sure that you’re harvesting losses in the right accounts, being methodical in your approach, and avoiding common and costly pitfalls that could derail all of your tax-savings efforts.

How to Profit from Tax Losses

The act of harvesting losses to minimize taxes can get complicated rather quickly. So then, here are three things you may want to consider to avoid analysis paralysis during open enrollment:

Step #1 Embrace the Benefits of Harvesting Losses

View tax loss harvesting as an essential tool in your investment toolbox to proactively manage taxes and optimize investment outcomes.

Ask yourself: When was the last time I reviewed my portfolio to identify opportunities for harvesting losses this year?

Remember, by leveraging downturns in the market and strategically realizing losses, you can offset capital gains and possibly reduce taxable income, allowing you to retain more of your wealth.

Step #2 Strategically Reinvest After Realizing Losses

Once you've harvested your losses, prioritize reallocating your capital based on current market conditions and your long-term financial goals.

Ask yourself: Which investment opportunities align with my financial goals and current market conditions?

Reinvesting capital after tax loss harvesting not only allows for potential future gains but also aligns your portfolio with current market conditions, reinforcing your financial strategy and ensuring your investments are continuously working for you.

Step #3 Understand and Navigate the Wash Sale Rule Effectively

Finally, you’ll want to familiarize yourself with the wash-sale rule, which restricts repurchasing the same or "substantially identical" stock within a 30-day window of selling at a loss.

Ask yourself: Do I own company stock or securities in my portfolio that could trigger the wash-sale rule, and do I have a strategy to avoid this pitfall?

By avoiding inadvertent wash sales, you ensure the effectiveness of your tax loss harvesting strategy and maintain the intended tax benefits, allowing for a more optimized and compliant financial approach.

You can learn more by reading this week's article in full 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 me stay on top of my own financial independence journey.

You can find links to these articles in the daily feed at https://app.fimastery.com

Staying the Course During a Shutdown
Energy makes time
4 Financial Worries to Cross Off Your List
How to be Rich and Anonymous
Optimizing for Joy

Thanks for taking a look,

Peter Donisanu

by Peter Donisanu, ChFC®, AIF®

Newsletter: How to Use Old Money Secrets to Creating Lasting Wealth

read time 11 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.

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.

Read the article here >>>

This Week at a Glance

What are the secrets that the wealthy families use to manage their money? They focus on principles. That’s why in this week’s article, I cover three principles that old money families use to pass wealth down from one generation to the next.
Risk assets find their footing after last week’s selloff. Inflation and labor market data will be closely watched by market participants for signs of the Fed’s next move. Check out the resources at https://app.fimastery.com for more market insights.
ICYMI – be sure to check out last week’s post and podcast on preparing for benefits enrollment. This resource will help you cut through the noise and help you create your own framework for choosing the best options for you.

Manage Your New Money Like Old Money

So, you’ve finally made it big in your career, or your startup has finally taken off.

What should you do with your money now?

Well, whatever you do, it's crucial to be mindful of the advice you take.

You see, all you need to do is log in to any social media website, and you're likely to find accounts that claim to have wealth "secrets" available only to the rich and famous.

But you know the truth is that when it comes to prudently managing your newfound wealth, there are no shortcuts out there.

In fact, Old Money families typically follow a tried-and-true principled approach to managing their money rather than spending their time looking for cheat codes.

To be sure, what distinguishes Old Money wealth from the New Money rich is not just how long a family has held on to their money but also what they do to keep that wealth growing from one generation to the next.

That's because it's one thing to make a lot of money and double it in short order and quite another to keep it steadily growing, decade after decade.

Look, Las Vegas wouldn't exist if tourists didn't have the chance to win big, but in the end, the house always wins.

So then, if you've made a lot of money and want to look for potential shortcuts that claim to pay off big, then more power to you.

How to Use Old Money Principles

But if you've accumulated substantial sum of money and want to utilize a proven approach that allow your money to grow from one generation to the next, then here are three Old Money principles that you'll likely want to consider.

Principle #1: Embrace Generational Thinking:

When setting financial goals, consider the next few generations, not just your immediate future.

Ask: How do I envision my family's financial health a century from now?

Adopting a multi-generational perspective ensures the wealth you’ve earned today endures the test of time, creating a legacy that benefits not just you but those who come after.

Principle #2: Distinguish between Wants and Needs

Successful old money families differentiate between essential needs and luxury desires within reason because they understand that their wealth will serve future generations.

Ask: Is this purchase driven by a genuine need, or is it an impulse buy that I should reconsider?

By making this distinction, you’re demonstrating sustainable spending habits for your family, which may prevent an unnecessary erosion of wealth.

Principle #3: Include Younger Generations

Make money management a collective family affair, involving younger family members early on with age-appropriate engagement.

Ask: Have I laid the foundation for a shared family vision that younger members will embrace and carry on?

Engaging younger family members now not only prepares them for future responsibilities, it also creates money traditions that can influence the lives of those yet to come.

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 me stay on top of my own financial independence journey.

You can find links to these articles in the daily feed at app.fimastery.com

Optimizing for joy
Overdoing delayed gratification
5 big lessons popular personal finance gets wrong
Make doing nothing the default
This is your stressed-out brain on scarcity
Markets react to hawkish Fed revisions
Say goodbye to the Great Moderation

Thanks for taking a look,

Peter Donisanu

by Peter Donisanu, ChFC®, AIF®

Newsletter: How to Tackle Benefits Enrollment with Confidence

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.

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.

Read the Article Here >>>

This Week at a Glance

Benefits elections are coming up and it’s often a grueling process for many of you out there. That’s why in this week’s article, I cover a 4-step process to avoid the fluff and efficiently navigate the enrollment process this year.
Markets are selling off this week on news that the Fed is holding rates higher for longer. If you’re wondering why, check out the article I published last month at fimastery.com
ICYMI – be sure to check out last week’s post on career planning. This is a hot topic that’s come up in many of my conversations this week.

Tackle Benefits Enrollment with Confidence

Benefits enrollment is just around the corner.

Do you have what you need to make critical choices at this vital time of the year?

Now, while benefits elections might seem like a routine administrative task, the decisions you make during this crucial election period could significantly impact your finances for years to come.

But for many of you out there, open enrollment might feel like a maze of features and benefits that can leave you feeling so confused and overwhelmed that you resort to box-ticking just to get it over with.

And so, what if we could change the narrative this year?

What if this year was the year where you finally stepped off the default path, and made your benefits elections with confidence?

What if this year, instead of rushing through the enrollment process, you mindfully took your time and opted into coverages that align with your lifestyle needs?

And, so, how do you achieve this outcome?

Well, this approach begins with a game plan for navigating the maze of health plans, insurance options, and fringe benefits available to you.

More specifically, when you know how to approach your benefits book, which common pitfalls to avoid, and how to select your coverage options, you can make wise choices this benefits season without being overwhelmed.

How to Avoid Getting Overwhelmed During this Benefits Elections Period

With all the options coming your way, here are three things you may want to consider to avoid analysis paralysis during open enrollment:

Step #1 Review Last Year’s Benefits Usage

When you reflect on the past year, were there any unexpected health or financial challenges that a different benefits plan could have better addressed?

Evaluating past benefits usage can provide insights into future needs, helping reduce out-of-pocket expenses and enhance financial growth. For instance, those with new chronic conditions might benefit from plans with higher premiums but lower deductibles.

Step #2 Avoid the Default Options

When was the last time you thoroughly reviewed your benefits package, and how can an annual review safeguard you against unexpected financial challenges?

Many employers are changing benefits this year to get ahead of costs. Coasting along without annually reviewing benefit changes can lead to unexpected expenses, jeopardizing financial control and stability. For instance, a previously covered medical procedure might now be an out-of-pocket expense.

Step #3 Block off Time on Your Calendar to Review Your Benefits

Ask: what can I do to set reminders and prioritize my decision-making to ensure that I don’t miss out on the best benefits available to me?

It happens more often than you think, well-intentioned folks simply forget. That’s why taking too long in benefit decision-making can result in missing crucial deadlines, preventing you from securing the best options for your financial needs and delaying your journey to financial independence.

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 me stay on top of my own financial independence journey.

You can find links to these articles in the daily feed at app.fimastery.com

This is your stressed out brain on scarcity
The real price of success
12 things that look less impressive as you get older
How to invest like the 1%
The past is not true
Don’t be surprised by China’s collapse
If China’s boom is over…
The Fed, Inflation, the 10-Year and the Dollar
What are banks saying?
Where are the extremes?

Thanks for taking a look,

Peter Donisanu

by Peter Donisanu, ChFC®, AIF®