8 minute read

First, a note - Money is a sensitive topic. Different people have different relationships with money. Money causes fights between people. These tips are meant to help, not insult anyone, and you shouldn’t feel inadequate if you aren’t in a particular financial position.


  • Start immediately; money (and good decisions) compounds, and getting started is better than waiting to become an expert
  • Prioritize; spend on important things and things you love, cut costs on others
  • Be proactive and intentional, not reactive or passive
  • Think about your motivations; understanding your desire to be wealthy might tell you how important it really is to you
  • Where possible, increase income rather than reducing expenses - since income can increase more than expenses can reduce
  • Invest money rather than save; that’s how one beats inflation
  • Be wary of investing in property beyond your primary place of residence; it takes skill and experience to find the right properties, manage maintenance and tenants, and so on


  • Sweat the little details - the coffees, the one-off small expenses, the minutiae; focus on big wins and don’t live in the spreadsheet
  • Be a victim; nobody will improve things for you except you
  • Worry about mistakes, which are inevitable, especially at the start
  • Worry about your approach being simple and boring; whether it works is really all that matters
  • Be afraid of negotiating for a better price on large items like mortgages, cars and houses
  • Be overwhelmed by information overload and the thousands of options out there


  • Set up a credit card (but never miss a payment, to avoid fees and interest) for some free money and rewards (note - there is risk in this, so you need discipline)
  • Pay off debt aggressively, starting with the highest interest/fees
  • Set up offset accounts and the right checking/savings accounts; interest in savings accounts is pretty small unless you offset a mortgage
  • Open up a 401k / superannuation fund, and make maximum contributions each year
  • Figure out how much you spend, and do a cull of waste; but still spend money on things you care about, since life is short
  • Automate your transactions so that managing money is easy, such as your monthly credit card payment and investment account deposits; this means you avoid fees due to lateness etc, but also combats lack of will power to save
  • Invest your savings in diversified, low-fee vehicles; mostly low cost stock index funds, and maybe some bonds if you are older or more conservative
  • Invest in safe, profitable channels like the stock market index (you probably don’t need a financial adviser - nobody can see the future, and advisors are often sales people or charge high fees)
  • Talk to your bank; many will have managers that you can talk to, to reduce fees and improve interest rates

Investment Rungs

  • Superannuation / 401k, where your employer matches a certain amount you contribute. This is free money, to a point. Look for an employer that offers it. This income is delayed, but that goes hand in hand with compunding and is subsidized by others.
  • Pay off credit card and other debt that costs more than say 8%, including mortgages and other loans (possibly via offset);
  • Contribute extra to superannuation / Roth IRA, up to the amount you can without paying tax
  • A combination of stocks, bonds and other safe investment vehicles; usually those that do not require picking particular stocks, but rather index funds with very low fees where you can keep reinvesting. One breakdown is the Swenson model:

Swensen Diversification Model:

30% domestic stocks 15% international stocks 5% emerging market stocks 20% real estate (REITS, etc) 15% government bonds 15% treasury inflation-protected securities

My thoughts are that this is more conservative than people under 50 (retirement age 65) would usually want, but it’s pretty good. Low fees are the key.


  • Cut what you don’t care about, but allow for things you do value (don’t sweat small stuff)
  • Focus on big wins; reducing large or recurring expenses first
  • Everyone in the family needs to be on the same page, lest you have tension

What If You’ve Already Cut Expenses?

  • Try to negotiate a pay raise, or more companies to somewhere with higher pay; always be looking to move, since this will give you the best opportunities and chances for pay increases
  • Related to the above; negotiation is a skill and it can be learned. Practice haggling on prices, being in uncomfortable discussions.
  • Consider side work, noting that selling your time is the source of income with the least leverage there is

There is nothing that’s truly passive. Different income will have different types and proportions of input; some will require little time (except perhaps initially) but more capital, and some will require ongoing time but little capital. Be wary of anyone who tells you that their income is truly passive. Are stock market dividends passive? Sure, provided you have lots of capital to invest, which you presumably made in an activate way to begin with. For someone who is starting out, that’s the typical trend; sell your time for money, and then progressively use savings for investment to get more leverage out of your time.