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HAVE YOU HEARD THE parable of the white elephant? In southeast Asia, possessing a white elephant was symbolic of power and prestige. It was a good omen to find one in the wild, signifying peace and prosperity for the kingdom. They were considered sacred and could not be used in war or for labor. To receive a white elephant from the king was a great honor. Who would turn down such a special and unique gift?
EARLIER THIS YEAR, HumbleDollar unveiled its Two-Minute Checkup. All you need to do is input up to nine pieces of information and it spits out advice covering 10 areas of your financial life. When I tried it, I thought it was great—except for one thing. The amount it suggested my wife and I have in emergency cash was $13,000 higher than what we currently had.
I felt comfortable with the amount of cash we were holding,
DURING THE RECENT bull market, I fell off the wagon and bought some technology companies, once again trying my hand at stock picking. I’m talking about companies like Spotify Technology, MercadoLibre and Roblox. It was a small percentage of my portfolio, but I felt the pain.
I’d tried picking individual stocks when I was younger. I thought I had a better chance now. After all, I was more educated and knew more about researching companies.
WE HAVE A PROBLEM: We may have saved too much for our daughter’s college education.
My wife and I started contributing aggressively to our daughter’s 529 college savings account as soon as she was born. For the first two years, we invested the full amount of the annual gift-tax exclusion, which was then $14,000. Now, the exclusion is at $16,000, but lately we haven’t been saving as much as we used to. The reason: Our early aggressive saving,
Comments
Equity crowdfunding. I was listening to a lot of popular VC's at the time and thought I should try investing in startups too. My only goal at the time was "get rich." I have 1 company that is doing really well, a few that held my money for years only to return my original investment when the company was acquired (0% return!), and the rest have either failed completely or are chugging along with few prospects for growth or acquisition. I don't think I realized at the time how painful having money tied up somewhere you can't access it would be. Since then, I've realized other goals and expenses I would have rather saved the money for instead, with much less risk. Learned the lesson though, and now try to keep my investing simple, goal-oriented, and liquid.
Post: What do you consider your greatest financial mistakes?
Link to comment from June 19, 2024
Maybe I didn't explain it well. You are correct, the things I had to pay for were NOT emergency expenses, which was exactly the problem. The problem was I ONLY had cash for emergency expenses (about 6 months to cover expenses if we all lost our our jobs), and NO other cash available for non-emergencies. I was trying to be "a good investor" and invest heavily for the future. I now realize that I was too heavily invested and didn't plan on having enough cash to actually enjoy life. It was the combination of poor year-long planning my part plus the extremely slim margin for error I made for myself that led to me having to dip more into my emergency savings than I would have liked. Does that make sense?
Post: Counting the Cash
Link to comment from November 2, 2022
Well our 5 year old is already playing 14y+ strategy board games with us, so I might in store to help pay for a PhD, who knows? Just happy knowing we're in a good position to pay off a bachelors is good enough for now. The animal spirits of the market will decide the rest.
Post: A+ for Effort
Link to comment from July 13, 2022
That would be amazing! And practical! And help the economy! (Which means it will never happen)
Post: A+ for Effort
Link to comment from July 13, 2022
I enjoyed trying to evaluate business models, investigating the competitive landscape, and digging into the financials of companies, for a time at least. But after awhile I found that it just takes too much time to track them all and keep up to date on the companies. A well-diversified portfolio is around 20 stocks, and I found it was not only more risky, but also more time-consuming. I'd rather keep it simple and go out and live my life instead. I found I prefer to read books more than I like reading 10-K's and 10-Q's. Listening to podcasts and audiobooks more than I like listening to investor conferences and earnings calls all day.
Post: Harsh Reminder
Link to comment from July 13, 2022