Opening Your Own Small Business Is an Adventure, but Shouldn’t Become a Nightmare

Learn from mistakes I’ve made, or seen my clients make…

Red neon sign saying, “IT BEGAN AS A MISTAKE.”
Red neon sign saying, “IT BEGAN AS A MISTAKE.”
Photo by Varvara Grabova on Unsplash

As the owner of several (really) small businesses, including a consulting practice and a financial strategy practice, here are the top 3 things I learned to not do, from my own experience and the experience of clients.

3. Not Setting Aside Enough Money to Pay Taxes (and Build a Reserve)

I met Jane (made up name) for a one-off coaching session to help her with this one.

Every January, April, June, and September, she’d get stressed and upset because of the large sums of money she needed to send to Uncle Sam and her state’s taxing authority. …


A Step-by-Step Guide for Building an Achievable Retirement Saving Plan

9 steps for figuring out how much you need to retire, and how to get there without letting despair overwhelm you…

Photo by Sylas Boesten on Unsplash

I love simplicity.

But sometimes, even if you avoid the trap of over-simplifying things, the simple answer is far from easy.

Case in point — the 1000-a-month savings retirement rule. If you’re not sure what that is, here’s a quick explanation, including how to tailor it to your personal situation.

Done?

Great, let’s start figuring out how to use the rule without getting overwhelmed by how much you think you’ll need to save for retirement.

Step 1: Going from Annual Salary to Estimated Amount Needed in Retirement

Let’s imagine a hypothetical guy, John, age 40, who makes $80,000 a year, putting him above 56% of Americans. To figure out how much income…


Personal Finance “Rules” Are Often Misused — Don’t Join That Trend

How to correct an over-simplified rule-of-thumb and tailor it for your personal situation…

Silhouette of a man’s thumb pointing up.
Silhouette of a man’s thumb pointing up.
Photo by Jan Antonin Kolar on Unsplash

In 2018, Certified Financial Planner Wes Moss wrote this:

For every $1,000 per month you want to have at your disposal in retirement, you need to have $240,000 saved.”

He called this “The 1,000 Bucks-A-Month Rule.”

The (Overly) Simple Math Behind the “$1000/Month Rule”

The math behind the $1000-a-month rule-of-thumb is simple.

If you take 5% of a $240,000 retirement nest egg each year, that works out to $12,000/year, which divided into 12 months gives you $1000 each month.

Painless, right?

Two Problems with Moss’s “$1000/Month Rule”

Moss assumed that if you retire between the ages of 62 and 65, you could safely withdraw 5% each year and not run out of money before…


The only argument for paying your mortgage off early is a psychological one. If you can't stand having a lien on your home, and are willing to sacrifice (almost) anything to get out of that situation, then paying as much extra as you can against the principal each month (or paying off the whole loan at once if you can) makes sense.

In all other circumstances, this is the opposite of being financially savvy, as I explain in detail here: https://medium.com/financial-strategy/why-prepaying-your-mortgage-is-almost-always-a-terrible-idea-88fa87977d77

The Cliff Notes version is this:

1. Your mortgage is the cheapest money you can get, and you will…


Should You Follow Your Fear or Your Greed?

With the S&P 500 up 14% year-to-date less than 6 months into the year, on top of 18% in 2020, how high can it go?

Photo by Gabriel Meinert on Unsplash

Occasionally, you run into somebody doing something super-creative and cool.

It happened to me today, when I saw a cool video created by James Eagle, self-described “Investment writer, blogger, data junkie and entrepreneur,” which he captioned: “The Dow Jones is 125 years old. In its honor, I’ve put together this animated chart.

Here it is:

Set to music, the video tracks the Dow Jones Industrial Average through 1500 consecutive monthly closes, calling out significant events such as the Great Depression, founding of various companies, and many recessions.

Here are my takeaways from the video:

  • Over the long term, the stock market will make you money. A…


Have Your Monthly Medium Payments Dropped in Recent Months?

How Medium calculates Partner Program payments seems to have changed, again…

Huge spread of pennies across the frame.
Huge spread of pennies across the frame.
Photo by Dan Dennis on Unsplash

Like many others here, I saw my monthly partner program payments slump by as much as 90% from 2019/2020 to early 2021.

Given that Medium had never been a significant source of income for me I wasn’t devastated, but I was unhappy, so I started thinking what could have led to this disheartening decline.

  • Could Medium’s reader traffic have dropped off? Unlikely. In fact, it probably continued to grow.
  • Could the growth in published content have outstripped the growth in readership? Possible, but hard to tell.
  • Could Medium have changed how they calculate their payout per minute of readership? Hmmm…


Do You Know How Big a Financial Catastrophe You Could Survive?

The venerable “net worth” is interesting, but its liquid variant answers far more critical questions…

A sheaf of hundred-dollar bills with golden coins on top — nothing is as liquid as cold hard cash.
A sheaf of hundred-dollar bills with golden coins on top — nothing is as liquid as cold hard cash.
Photo by Dmitry Demidko on Unsplash

I came to this country owing more than I owned.

In personal finance terms, I had a negative net worth. Negative $4000 to be precise.

But in reality, my finances were even more fragile than that sad number. That’s because part of my nominal net worth was tied up in a used car for which I’d paid $8000.

If an emergency came up and I needed money, I’d be hard-pressed to sell my car immediately, and even if I managed it, I’d probably have had to lower its price significantly.

How do you capture that fragility, or in a better…


Human Psychology Poses Multiple Risks to Your Ability to Build Wealth

The “Wealth Effect” poses an even bigger risk to your financial future than even lifestyle inflation

Woman with makeup appearing to be blood dripping from her mouth.
Woman with makeup appearing to be blood dripping from her mouth.
Photo by David Balev on Unsplash

Hate your boss?

Your job?

The daily 9–5 grind?

The sense that whether you want to or not, you have to keep working to avoid financial ruin?

There’s an almost magical allure to the thought of being the master of your own time. Being able to pick and choose what to work on, when, how long, and how hard, without your financial survival hanging in the balance.

That magical time is called Financial Independence (FI for short).

If you’re striving for your own FI, know that there are two monsters lurking in the dark, like vampires waiting to suck the…

Opher Ganel

Consultant | physicist | sys eng | writer |financial strategist (opherganel.com) | avid reader | amateur photographer and artist ➜ medium.com/financial-strategy

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