The Moneysaurus

VERSION 1.0.6
August, 2018

Welcome to The Moneysaurus; the ultimate one-page introduction to investing, financial independence (FI) and early retirement!

This guide does not have depth, nor breadth. But that's intentional! There are already so many - almost too many - talented and intelligent bloggers out there writing about these very topics in brilliant, gory detail. Instead, this simple guide serves as a place to consolidate and condense the best-of-the-best financial wisdom into a single, digestible resource.

Whether you're fresh out college , rapidly approaching your golden years , massively in debt , or anywhere in between, this short guide is for you. I'll hold your hand and walk jog you through the fundamentals, teach you how to easily invest your money and build wealth, while also showing you the light, via the glorious FIRE , at the end of the investment tunnel!


Table of Contents


Money Basics


Before You Invest


Investing Basics

Before we get into the how-to, here are some basic investment principles:


What, Where and How To Invest

First, some good news; investing in the U.S. has never been easier. With an internet connection you can start investing in just a few minutes flat. Before we begin, let's take a quick glance at our pre-investment checklist:

I understand that there are no guarentees when investing. See the disclaimer.
I track my expenses, and have a monthly budget.
I have an emergency fund worth at least 3x my monthly expenses.
I have money to invest that I won't need in the immediate (~5-10 year) future.

Good so far? Now check the following:

I know roughly how much money I need to have invested to be considered Financially Independent.
I understand the difference between tax-advantaged and taxable accounts.
If my company offers a 401(k) with employer matching, I am contributing enough money to get the full benefits.

If you've checked off all of the above, then you're ready to invest! There are really only a couple of investment paths that I consider effective and simple enough to recommend; both paths are easy to follow, and require almost no maintenance.

Investment Technique #1

Manually invest in broad-market index funds.
  1. Open a personal investment account over at Vanguard. Vanguard is the best investment company, hands down. It's actually owned by the shareholders of its funds. This means that when the company is profitable, those profits go to the people who own Vanguard funds! But don't take my word for it, let me google it for you.
  2. If you have less than $10,000 to invest, buy the following index fund: VTSMXThis fund represents the entire U.S. stock market. When you own this index fund, you literally own a fraction of every publicly traded company in the United States. Cool, right? Once you have $10,000 invested in this fund, convert your shares to the "admiral" version of the fund to reduce your fees: VTSAX.
    If you have more than $10,000 to invest, you should instead invest in the "admiral" version from the beginning: VTSAX. Just like VTSMX, this fund represents the entire U.S. stock market, but has an added benefit of lower fees. The only catch is that it requires a minimum investment of $10,000.
  3. Buy more shares of VTSAX always and often. The best way to do this is to set up automatic investing via the Vanguard website and purchase additional shares each month.
  4. Hold on to your shares. Never sell these shares. Let them grow and continue to buy more.
  5. Sit back and wait. Once you have 25 times your annual expenses invested, you're financially independent! At this point, you might want to consider adding a bond-market index fund to your investment portfolio in the form of VBTLX. Investing in bonds will help stabilize your investment portfolio and smooth out some of the hills and valleys associated with the stock market. Post-retirement, consider an investment ratio around 75% VTSAX (stocks) to 25% VBTLX (bonds).

Investment Technique #2

Invest in index funds via a robo-advisor service such as Betterment or Wealthfront.
  1. Open an account with Betterment or Wealthfront. Both of these services are robo-advisors that provide you with low-cost, automated investments. When you open an account with either of these services, you'll be given a guided walk-though that will have you up and investing in no time.
  2. While you're young, be aggressive with your asset allocation. When investing through a robo-advisor, you'll get to select your risk tolerance; in other words, you'll get to select your ratio of stocks to bonds. If you're in your 20s or 30s, nothing's wrong with a 100%-stock-to-0%-bond ratio.
  3. Buy more shares always and often. The best way to do this is to set up automatic investing via the Betterment or Wealthfront websites/apps.
  4. Hold on to your shares. Never sell your shares. Let them grow and continue to buy more.
  5. Sit back and wait. Once you have 25 times your annual expenses invested, you're financially independent! At this point, you might want to consider adjusting your risk tolerance such that you add more bonds to your investment portfolio. Investing in bonds will help stabilize your investment portfolio and smooth out some of the hills and valleys associated with the stock market. Post-retirement, consider an investment ratio of 75% stocks to 25% bonds.

And that's it. Simple. There's really not much to it. There's no top-secret strategy, no market timing tip, and no black magic. It's all about investing early, consistently and letting compound interest do it's sweet, sweet thing.


Other


Great Financial Resources

Want to learn more? Good for you! Here are some of my favorite resources:



For legal purposes, please be aware that your use of the information provided by this website is at your own risk.
I guarantee absolutely nothing.
Please read the disclaimer.