You Were Born Rich Chapter 2

 As you might know, I did a podcast covering chapter 1 of You Were Born Rich. My thoughts were pretty mixed, ok, mostly negative. Have a listen here if you haven't already, at the very least it is entertaining.

I finished reading chapter 2 recently, which was much shorter and less crazy. In this chapter we have some actual personal finance advice and not just wishful thinking.

Bob asks the question, “how often do you pay yourself?” I don't even really know what this question means? Pay yourself? Does he mean save? If so, is that just putting money into a savings account? If so I pay myself like 100% first and then it tickles down to where it is supposed to go.

Bob later clarifies, it should go to a special account that you do not have easy access to. So like in my case, right off the bat my money goes into my 401k, which seems to fit this bill. He says do it on Monday, like literally what you earn on Monday. Which as a salaried person is kind of a confusing concept to me. He says it should be 10% so ok. I contribute 20% so I am good there. Actually I misread that, that 10% is what you do Monday morning, Monday afternoon and Tuesday morning you use 20% to pay down debt, but I exclude my mortgage from that. Additionally, my 401k might not count because I need to pay insurance (life presumably) with this first then make wise investments. In retrospect, this system is a little confusing, maybe I need to reread the chapter!

Let me summarize all the places you money should go.

10% to yourself (for investing like we just covered)

20% to pay down debt

70% to do everything else.

I will try to apply some of these principles to myself. I wonder what would happen if I had an additional segregated account outside my retirement accounts for investment?I wonder what I might do with it. Perhaps I could invest in some things outside of the stock market, as almost all of my investments are in equities with a touch in other financial assets.

My actual breakdown is a little different than this, I think it goes more like:

1- 20% 401k (20% until maxed)

2- XX% HSA (not sure what percent this is, I max it in either case)

3- XX% IRA (maxed once a year)

4- Investments outside retirement accounts/HSA. Not sure, some.

Debt payment, only my mortgage. Outside of that I have no debt. So I’m actually not entirely sure if I am or am not living up to Bob’s principles of this chapter.

The last activity I wanted to mention was a breakdown of what you would like to spend in the next year if you were living your best life. I’ve prepared that chart, and might share it here if I can get the formatting to work.

If I follow the guidance I think, my best life includes two big trips, one to France and Europe and another to, I don't know, Asia or somewhere I guess. I suppose I need to be a little more specific in my vision to actualize it? At least Bob might say that. The other ideas in the list include a Tesla (I wrote this a long time ago, before the whole Elon Musk madness), dining out weekly, putting a lot of money into savings (well probably investments really) and some other odds and ends. 

In retrospect, I’m not sure what this chart was meant to prove. Also I misspelled the word out.

Anyways, I will keep reading the book and see what format I will use for further updates. Hopefully one that makes a little more sense than this post!