Financial
Warfare
1.) Live way below your means!
Example: If you can afford a Mercedes buy a Honda Accord.
The biggest killers is student loans, credit card debt, car/truck loans, home mortgages and God forbid medical bills. We live in a debt nation so avoid it and/or payoff as soon as possible.
Never have a mortgage greater than 2 times your gross income and finance with 15 year loan.
If you want to have life where you can save and invest plus money for the extras never overpay for housing. You will have to save for a few years but it well worth it as the savings in mortgage interest cost is staggering.
Also with a 20% down you avoid private mortgage insurance (PMI is used for possible default) an expense far greater than just a nuisance. Not an easy task with property prices moving upward at breath taking speed but well worth it in the end as you will have a smaller payment and a paid off house in 15 years (or less if you make extra payments).
2.) Increase your means!
Work on your career pushing for that next pay raise or promotion. Early in your life have a part time job as well.
3.) Avoid debt like a deadly disease!
Use your debit card exclusively only rarely use a credit card and when you do pay it off at light speed. If investment returns are less than the cost of your mortgage and/or student loans make additional payments. Get rid of debt!
4.) Have excessive savings!
They say having 3 to 6 months of saving is good enough. That's BS! Life will throw you more curve balls than a professional pitcher from your favorite team. 3 months in checking; 3 months in high yielding savings account; 6 to 18 months worth of savings in an account with Vanguard's short term bond fund - Vanguard Short-Term Investment-Grade Fund Investor Shares.
One or even two year’s worth of savings is not out of the question. We live in a world of downsizing, mergers-buyouts, economic declines even hurricanes that flood out the Appalachian mountains of Ashville NC!
5.) Invest conservatively and consistently!
Don't try to go shoot for those mega returns look for the slow and stable returns defined as below average return upside, above average in flat markets and superior returns downside.
My favorites:
The Permanent Portfolio Fund
This all economic season fund is the brain child of the late Harry Browne (all of his ideas surround this blog) with a fixed asset allocation shown below.
Target Portfolio Structure:
- 20% - Gold
- 5% - Silver
- 10% - Swiss Franc Assets
- 15%- Real Estate and Natural Resources
- 15% - Aggressive Growth Stocks
- 35% -Dollar Assets
Vanguard Wellesley Income Fund Investor Shares
At this moment 11-5-2026 stocks are massively overvalued, however the stock holdings in Wellesley Fund are not the high flyers of today they are the big dividend payers. This fund holds approximately 35% stocks and 65% in bonds.
6.) Automate your savings
Almost all HR/Payroll departments will allow you to split your take home pay to two different checking/savings account. Send a portion to build up your high yielding savings account (HYSA) once that is finished then set up an auto draft from your savings to vanguard into your short term bond fund. Once that becomes too big, call Vanguard and shift a portion to Wellesley or whatever fund depending on the valuations of the market.
Example: Let's say your putting in $500 per month into your high yielding savings account straight in from your paycheck overtime you've achieved your 6 months emergency money. Establish an account with Vanguard's short term bond fund and auto-draft from your savings $250 per month.
Once you've passed the two years in savings once per year (January is a good month) - [have your smart phone send you reminders] call Vanguard and transfer the excess from your short term bond fund into your long term stock/bond fund. Any excess from your HYSA send that money to your short term bond fund.
7.) To 401k or not to 401k??
The vast majority of these plans have fee's that are way too high. Most of their stocks funds has an expense ratio 2% plus and have additional fees to manage 401k structure. Wellesley Income Fund expense ratio is 0.23% with no other fees of any type attached! Once you have $50,000 this shifts automatically to Vanguard's Wellesley Admiral fund and drops the expense ratio to 0.16% and again no other fees of any type attached!
So...If your 401k is loaded with fees - and it most likely is - if your company has a match then invest up to that amount and no more.
Roth IRA set it up with Vanguard here is their link.
Video with the late Jack Bogle explaining the tyranny of compounding fees! Click HERE
By the way I receive zero money from Vanguard it is simply my opinion that they are great ultra low cost providers.
8.) Be careful who you marry!
If you marry a spender you will end up working well into your 70's. A bit out of my wheel house but I felt compelled to add this - as this dynamic happens way too often with couples.
