Weekly Mix #167 - Getting Rich, Lessons from COVID and Sailing

Weekly Mix #167 - Getting Rich, Lessons from COVID and Sailing

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Happy Monday!

A quick reminder that I’m in the middle of writing 30 mini essays in 30 days. You can read them in this Twitter thread.

The exercise of being forced to write each day—well, at least the added social + financial pressure—has been a reminder of how useful a reset can be.

I’ve written on my blog for a long time (almost 5 years), have written hundreds of essays in my lifetime, and countless words at work.

But as a result, I’ve built up a kind of a mental resistance to writing anything that isn’t as in-depth, detailed, or carefully thought-out as some of what I consider my best writing.

It’s never been easier to write and publish, but I’ve become my own biggest barrier to doing so.

The greatest value this exercise has given me is reducing that mental barrier required to sit down and start writing. I can make it happen when I want. I just need to remember, and put a little less pressure on myself, and trust the process.

I’m hoping at the end of 30 days, it will be even easier.

So, if you feel like you’re not quite in the routine you want to be—waking up early, exercising regularly, writing, journaling, whatever—try reducing it to a tiny accomplishment.

Try reducing that barrier. Just do that little thing for a while. Use it as a reset, and go easy on yourself.

At the end of 30 days, you might just find you’re back in the groove.

In this week’s newsletter:

Book Notes: I Will Teach You To Be Rich - Ramit Sethi​

Article: The Big Lessons From History​

Product: Libby (app for reading library books)​

Random: The Vendee Globe Ocean Race​

Video: America’s Cup Team NZ​

Have a wonderful week!

Graham

Book Notes: I Will Teach You To Be Rich - Ramit Sethi​

This is one of the personal finance books I re-read every couple years, and revisit the notes frequently.

Easy to read, to the point, and in Ramit’s fun writing style, this book covers all the important basics of personal finance with strong opinions and actionable steps (a 6-week implementation plan).

Even for someone well-versed in personal finance, there’s always value in reinforcing the principles. I always pick up something new each time I re-read.

Key Takeaways

The single most important thing you can do to be rich is to start early.

People love to argue minor points about finance, partially because they feel it absolves them from getting started.

Instead, you need to cut through all the info and just get started.

Set up accounts at reliable, no-fee banks, and then automate savings, investment, and bill payments.

Getting started is more important than becoming an expert.

Spend extravagantly on the things you love, and cut costs mercilessly on the things you don’t.

Before you start, ask yourself: why doo you want to be rich? What do you want to do with your wealth?

Pay off your credit card always, on time. Keep your cards for a long time, keep them active, and use less than 30% of their limit (ask for a limit raise if needed).

Yes, you do need a budget. Start with monthly fixed costs, add long-term investments, then you have guilt-free spending money. Tweak this plan as you go. Good benchmarks:

Monthly fixed costs: 50-60% take-home pay

Long-term investments: 10% take-home pay

Spending money: 20-35% take-home pay

Automate everything:

Pay your bills automatically

Schedule transfers to your savings account

Schedule transfers to your investment accounts

Note: think about your scheduling—when you get paid, when bills are due, etc. to make this optimal.

How to save and invest:

Fund managers and investment managers rarely beat the market (75% of the time they don’t), take higher fees, and have incentives that aren’t aligned with you (like commissions on specific investments).

Instead, use an index fund investment service (like WealthSimple, or WealthFront) which is low-fee, and automatically invests in a diversified portfolio of index funds.

As you get older, your portfolio should probably get more conservative (more bonds, less stocks).

Create an emergency fund for unexpected events (they WILL happen).

Negotiate a raise. This is one of the most effective tactics for increasing your savings long-term.

Buy a car with good reliability, that you will drive for at least 10 years, which has a good resale value, and is fuel efficient. And stay within budget.

Some rules for buying a house:

Only buy if you’re planning to live there for >10 years.

Only buy if you can afford at least 10% down payment (20% is better).

Your mortgage is not your only fee. You’ll have hundreds more per month in maintenance, insurance, property taxes, etc.

Article: The Big Lessons From History - Morgan Housel​

I just finished Morgan’s new book, The Psychology of Money, and enjoyed it thoroughly. This piece was very good as well.

He points out that we can learn from two things in history: specific events, and broad behaviours. The second is much more useful.

This article outlines 5 lessons from COVID-19:

Calm plants the seeds of crazy

Progress requires optimism and pessimism to coexist.

People believe what they want to believe, see what they want to see, and hear what they want to hear.

Important things rarely have one cause.

Risk is what you don’t see.

Product: Libby​

Libby is an app that you can use to get loaned ebooks from the library. I've been using it on my iPad, and the reading experience is great; the book selection from my local library is great too.

I haven’t figured out how to easily export highlights yet, but I’ve been using it to read adventure novels before bed. You’ll need a library membership first.

One of the categories where books always seem to be available: classic novels.

Random: The Vendee Globe Ocean Race​

This one is a little outside the usual newsletter content, but for those of you who are fans of sailing, extreme sports, engineering and/or human psychology, this race is fascinating.

The only non-stop, solo, round-the-world ocean race, this race leaves and finishes from France, with the sailors going south around Africa, around the Southern Ocean, and then back up the coast of South America to the finish.

It started about 10 days ago, and has one of the largest fleets ever—33 boats—with the most advanced boats ever sailed in the race (hydrofoiling 60-footers).

Video: America’s Cup Team NZ​

To keep with the sailing theme this week is a video from the America’s Cup training happening in New Zealand. These might be the craziest sailing boats in the world today, and they share a lot of technology with modern aircraft. The competition starts in March.

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