Start Here – The recipe for wealth accumulation

**** I wrote the below series of posts three years ago. I think all three posts are now much better summarized by this “book” that I started last year (but haven’t finished). You may download the ~60 page draft pdf here. ***


Given how taboo talking about money is, many of us are financially illiterate – we have no idea how to save, how to invest, etc. This illiteracy is problematic and needs to change.

My own financial illiteracy was evident when I was hired as an intern by a Fortune 25 company during my undergrad. During orientation, some HR woman was yapping about a 401k. I didn’t have any idea what she was talking about, so I opted out of the 401k. I figured, “I’m a poor college student why should I care about investing in retirement, which is 45 years away? I need the money now.”

It turns out that my company matched 75% on contributions up to 8% of my salary. In other words, I threw away 6% of my salary because I didn’t exploit the company match. In hindsight I realized that even if I had needed the money during my undergrad, I could have taken an early withdrawal on the 401k and paid the penalty and still been way better off.

It was this experience which prompted me to learn more about personal finance. Over a decade later, I’ve devoured every blog and book I could get my hands on.

Fortunately, anyone can master their finances. It does not require a PhD or a high IQ. With a bit of guidance, practically anyone in the U.S. can be a millionaire.

The recipe to generating wealth is dumb simple, as I’ll document thoroughly in this blog:


Following the above advice, I will regularly update our journey here:


This site is for entertainment purposes only, as disclosed here:

5 thoughts on “Start Here – The recipe for wealth accumulation”

  1. I need advice. I just turned 65 y.o. two months ago and I plan on continuing to work for the foreseeable future–at least the next 5-10 years. My wife and I are psychotherapists and we are establishing a new private practice after relocating to NC. Our goal is to convert a stable on our property into office space for use while we are working and then re-purpose as either Airbnb or rental property thereafter. We have about $300k in traditional and Roth IRAs, but my dilemma involves the $1.4 million we have in “blue-chip” (Apple, Comcast, Verizon, AT&T, PG, Google, Facebook, etc.) equity trading accounts. Of that amount, most are dividend paying stocks. Our goal is to move our basket of equities into index funds so that we can simplify our investment strategy and minimize our exposure. My dilemma is how to accomplish this conversion without getting killed with cap gains. Any ideas, suggestions would be most appreciated.

    • Good question Bobby. Here are a couple of strategies to mull over. First off, congrats on the savings. Seems like you’re doing very well for yourselves. As you know, the current tax code taxes long term capital gains (LTCG) at 0% up through the 15% tax bracket. If you and your wife are still working, I would assume you are well North of the 15% bracket, and likely facing long term capital gains of 15% ( So you have a trade-off to make.

      Option 1.) Sell your stocks and realize the LTCG, pay 15% taxes now (perhaps over a period of several years to avoid the 20% region in the 39.6% tax bracket), then reinvest in broad index funds. Pros of this approach: Get the diversification you desire. Cons of this approach: You piss away 15% of your 1.4M in taxes.

      Option 2.) Take a more refined approach. Only sell stocks for which you have relatively low LTCG. Perhaps some stocks have even gone down in price and you can realize capital losses? If not, surely you have bought at several points in time and thus have different costs basis for each purchase lot. You can simply sell the lots with the highest cost basis to minimize your tax burden.

      Option 3.) Hold off on any rebalancing for a few years (i.e. until retirement). Why? With labor income dropping to zero, you will have plenty of opportunities to realize gains at 0% tax rate up through the 15% tax bracket. With standard deductions and married filing jointly (and perhaps even itemized deductions), that’s actually a relatively high threshold (25% bracket begins at 75,900 of taxable income, but standard (or itemized) deduction + personal exemptions * 2 will get you closer to 100k of income tax free once you’re truly retired. GCC blogs extensively about these strategies here:

      If I were you, I’d probably opportunistically do #2 above if you have low hanging fruit (lots with relatively low unrealized cap gains), but option #3 if not. Diversification is great (i.e. #1 above), but it’s painful to get murdered by taxes….

      Hope that helps.

  2. Thanks for your suggestions, FP. Unfortunately not much in the way of low-hanging fruit cost bases, but I will review equities for candidates. Option #3 makes the most sense even prior to retirement. Solo 401k contributions along with MERP will enable us to reduce our taxable professional income significantly while we incrementally convert individual equities into index funds.

  3. “Fortunately, anyone can master their finances. It does not require a PhD or a high IQ.”

    This is literally true. In fact, you don’t even need an average IQ. My 58 year-old brother-in-law is literally retarded. He can’t decipher an analog watch or drive a car or follow the most simple of logical arguments. But he worked all of his life in a menial job, barely above minimum wage, and got up at 5 am to catch public transportation to get to work on time. He was frugal, and consistently saved money in a 401(k) and an IRA. He has never received welfare, housing assistance, food stamps, or unemployment insurance. He lived in his own apartment that he paid for himself, and paid his bills for food, utilities, etc. (I.e., he wasn’t on his parents’ payroll. The apartment was in a complex supervised by a charitable organization that did provide supervision and assistance with logistics, but not in payment, of the bills. He even paid HOA dues for this, but the supervisory services were subsidized by a private contributions.) I do his taxes, so he does get a small EITC and savings credit, but he’s been a net taxpayer in most years.

    According to Investopedia, the “estimated median savings of the average fiftysomething is about $117,000”. His is about three times that. And that was without any extraordinary capital gains because my mother-in-law has always been afraid of the stock market. His 401(k) is overwhelmingly in the stable value fund, and IRAs are in CDs at the local credit union.

    • Great story and a great reminder that all of us have the ability to save, by consistently living below our means. It’s easier said than done to drown out the temptation to keep up with the Joneses or to succumb to relentless barrages from marketers who send us signals that we’ll never be happy/loved/content/successful by living a simple life.


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