You don’t have to study business or finance to be wealthy or comfortable handling money.

The most advanced math you will ever witness in investing, sales or managing your bills is basic algebra. Those TikTok/Reddit retail traders you hear about on social media most likely aren’t earning millions because they went to Wharton. They got lucky and are learning outside of the classroom, because that’s where the real learning happens.

Regardless of what you majored in during college or what profession you hold today, money is all around us and involved in everything we do. At work, at home, at the playground, at school, grocery store and of course in the Uber, we must know how it pertains to our lives to stay free and secure. Money is a driver of immense feelings, including uncertainty and emotional guilt, and it is the number one stressor in American’s lives.

Since forever, money has been a taboo. It still is and most likely will be in certain settings for as long as we know it. We still don’t know exactly how much our co-workers make, and Google doesn’t acutely know how much that celebrity is worth at this very moment.

By far, one of the key takeaways I’ve ever grasped from the personal finance world is that everything is relative. What you purchase might not be appropriate and ridiculous for me and how much I spend on this burrito might be ridiculously low for you.

We all have priorities and know what we need, although sometimes we don’t which leads majority of Americans into debt, specifically toxic debt that doesn’t appreciate. Comparison is truly the theft of joy because perception doesn’t equate to reality. Most of the time that person in full fledged Gucci isn’t as wealthy as that Silicon Valley billionaire wearing a gray t-shirt and driving a Honda a.k.a Zuckerberg. Flexing and flaunting what you have isn’t rich anymore. Yes, we need to dress to impress at an interview or at work to an extent but other than that, you are boasting about what you most likely don’t have.

Most of the wealthiest people I know hide and guard their wealth so much it’s virtually impossible to ever find out that they are shy of reaching a net worth of a billion within a few years if business keeps up at this pace. They live in remote low-scale areas primarily for security purposes and most importantly becuase they want to live that way. They can buy and do whatever they want with that type of wealth but they’ve chosen a down to earth, realistic, pragmatic Buffett style way of life that they don’t need to worry about anyone chasing after or protesting against.

One rule of thumb that’ll save you in life and especially on the streets of NY: Always minimize what you own and never show off.

It is a recipe for disaster to flaunt your belongings especially since it’s not always about what you know but who you know to get ahead. The last thing you want to do is make someone envious of you when you’re asking for a referral.

Stealth wealth reminds me of how we unleash our true character in arguments. If you’re confident and actually persuasive then you don’t shout nor justify. You have nothing to prove and talk the least. As opposed to someone who has nothing in their bank account or twisting the truth in an argument, they are usually in it to prove nothing and argue the hardest.

Looks are extremely deceiving and when you’re the real deal, you focus on what propels and stimulates your mind, not drains it like picking out outfits to impress people you don’t know with money you don’t have. With 80%+ of luxury car owners not able to afford their car, there’s a serious problem in the world of flaunting.

Thankfully I’ve picked up on a few tricks to minimize this selfish and draining behavior. If you learn these on how to preserve your capital, set up attainable goals and get back to the basics, you’ll live a more carefree and fulfilling life with money by your side not pulling your teeth.

Image by Unsplash

Backlash and Avoidance

Discussing money is awkward especially when you aren’t involved in the financial world and don’t know other’s takes on it. In middle school when I coached tennis at an elite country club to amateaur level adults, all I would hear on the sidelines from the members who happened to work on Wall Street were deep discussions based on their finances, divorces, lawyer troubles and vacation bills. I felt as if I was intruding onto a portfolio manager’s client presentation as it was absurdly in-depth and personal.

These members were so open to revealing their strategies that make them millions and the tax advantages they embark upon to reduce their donation to Uncle Sam that it was uncomfortable! While with the morning group of avid tennis players who weren’t immersed in the banking world, money wouldn’t be mentioned one bit and almost seen as a sin to discuss.

What you are exposed to, you become more comfortable with and since most families don’t want to dive into the topic worried their loud mouth kids will tell the whole community all their portfolio moves, the parents end up keeping it to themselves and slowing down the wealth building process for the next generation. If you don’t want to talk about something, it’s usually a sign you don’t understand it or are bad at it. It’s very difficult to become comfortable with anything if you don’t know anyone who does it in the first place. Since we are the average of the people we are with, choose wisely who you spend your time with!

Reversed Passion

I sincerely believe things happen for us not to us and sadly I found my mission for personal finance after the worst experience of my life when my father unexpectedly passed in HS. As all family members deal with, my father’s death flipped me and my mother’s life around and we soon realized how vital it was to never to be dependent on anyone, especially females who tend to rely on the male of the household to pay the bills!

Thankfully times are changing and men aren’t the sole breadwinner of households anymore yet there still needs to be major improvement. Believe it or not a reason why women are leaving the workplace is due to temperature!

Women are working more than ever but they still take on the hidden chores and childcare duties that men push aside at home. In the last year, 3 million women have dropped out of the labor force to work on family-life balance which isn’t tightening the gender-pay gap any further.

The beauty about personal finance is that you don’t need to do any math. What we’ve been taught at school with derivates to fancy calculus equations can be tossed out and overtime or the next day usually does. Memorization never helped anyone. Cash flow to LBOs, VBOs to FICO scores are applied, depending on how in-depth you are willing to go but not necessary right away when starting to invest, get out of debt or start over which in most cases entails having a plan on prioritizing saving more than you are spending, getting out of toxic debt, owning assets not liabilities, not comparing yourself to others, having a realistic budget not someone else’s, and most importantly, letting money provide you an enjoyable life.

It’s better to have more than less.

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If you don’t enjoy life while being able to handle your money, there’s a problem. Though, you’re not alone. This is most commonly found amongst the top 1%. Ironically it is more common to find people who enjoy their lives while not being able to handle their finances due to carelessness and part of millennial-hood.

But not being able to enjoy the fruits of your leisure with everything in order calls for the therapist, better expectations and realizations that money in fact does not solve all our problems nor makes us happy after a baseline income of roughly $70k.

Money is overwhelming not just to discuss but to ponder upon. Fancy charts, crazy calculations, numbers and assumptions get all over our heads. Jim Cramer makes me nervous straight away! Thankfully once you know the basics, it all gets easier from there.

Finally, this is the time you’ve been waiting for.
Here are seven concepts that will help you go a long way towards making your life easier.


#1 Risk Management

“Risk whatever you’re willing to lose” is a classic phrase that will never go out of style.
Never put all your eggs in 1 basket entails allocating appropriately what you can handle which will put you in the best position.
Investing is a frame of mind. It isn’t gambling or Vegas. It is about having an appropriate split in your portfolio to help you achieve the life you want to live. There’s no point in making money if you can’t spend it but you must know what you will spend it on, hopefully assets or things go downhill from there.
By doing so, regardless of age, everyone needs to know what they can risk, handle and tolerate. The best way to do so is by considering factors such as:
-Time horizon
-Risk tolerance (conservaive, moderate, aggressive)
-Short/long term goals (for withdrawal purposes)
-Not tying emotions to decisions

Females are known to be more risk averse because they live longer. The longer life span one has, the more conservative by nature they must be to preserve their capital not take crazy bets in the market against meme stocks. You would think taking on less leverage and rebalancing moves you into the slow lane yet in fact it’s the opposite if you are patient, a virtue in life.

Portfolios run by females are known to return at least 2% more than males’ and carry less debt as well.

All in all, knowing what you can chew and what will keep you sane and afloat at night is the first step.

The next step is allocating the funds appropriately which is embedded within diversification.

#2 Diversification

According to the Modern Portfolio Theory, the more diverse you are, the less risk and more return your portfolio can provide.

How is that so?

The more alternative assets you own which may include farmland to real estate, NFTs to collectibles that are uncorrelated to each other, and the overall market, the better your returns will be since there’s less volatility and more variance.

A good rule of thumb in real life pertaining to diversification is to invest in assets unrelated to your profession. For example if you work in tech, you most likely own stock options within your company and are bias towards tech stocks but in your investments, having a high concentration of it can be detrimental. Tech is very volatile as it is categorized as growth stocks so if your tech job one-day vanishes because the CEO was caught in some legal trouble or the company was forging profits, the stock will go bust which translates into negative returns for you something you cannot bare as you already lost one income source.

Although you may love your company, don’t love it too much that you forget about the future and other options to stay afloat.

Similarly to marriage. Most couples don’t believe separate bank accounts is needed or 2 spouses to work until they separate.

Plan for the worst, hope for the best.

The stock market can seem overwhelming with thousands of options, variables and changes on the publicly listed exchanges per day yet more often than not, your safest and most reliable bet especially if you don’t want to watch your holdings like a hawk is to simply invest in an index fund from Vanguard or Fidelity, two reputable brokers I prefer over retail trading apps like WeBull or Robinhood.

Buying into index funds that monitor/track an underlying index such as the Dow Jones or S&P 500 will give you exposure to over hundreds of companies. If one flops, your portfolio will automatically rebalance and won’t be hit as hard. Anyone can get lucky but not everyone is right.

An index fund is the epitimy of diversification.

#3 Pay Yourself First and Always

As a personal finance guru, the most common phrase I hear that’s overused and misunderstood is PYF. This is a popular abbreviation that tends to be misused. From first glance, it sounds like we should be spending then saving, the exact opposite of what it truly entails.

It means you should think about paying your future self first by setting aside a pre-determined portion of your earnings in a savings account. I get it. Savings generates nothing but a cash cushion is always necessary because as we’ve witnessed during the pandemic, what’s certain is uncertainty.

These savings accounts can come in different forms and sizes. From a compounding machine in a Roth IRA to an employer qualified retirement plan such as through a 401(k), 457B depending on your employer or IRA as a self-employed gig worker, focus on your long-term horizon because the past is behind us.

We are so warped up in living in the present, which isn’t a bad thing, but can be once we realize that the future is determined when we plan and take action right now.

It’s important to pay yourself first so you don’t use it for nonsense. Set up automatic payments so that bonus or tip don’t lure you into a shopping spree. A percentage of money deposited into your checking immediately gets invested into your savings account, investment account and retirement account.

Pay yourself so you don’t wreck yourself later on. Starting early matters.

Compounding is the eight wonder of the world because time is your most precious asset. After allocating what you need through the 50/30/20 rule of budgeting, stash the rest away.

#4 Liquidity

Liquidity is an asset type that can be used ASAP. The most liquid investment is cash. The most common least liquid asset is physical tangible real estate or some foreign investment that you cannot sell easily within an hour.

Liquidity is necessary in case you need cash. Life happens so it necessary, even when you are 25. It’s disappointing to see millions of Americans go into medical debt each year because they didn’t set aside extra cash or let alone sign up for health insurance so they fell into the trap of paying double out of pocket costs and possibly worst of all need to sell your investments with hefty short-term capital gains tax on top to survive.

What a mess all because of no cash! If you are overly optimistic no hurricane or flat tire might happen, expect to loose more income streams and make it harder for yourself to pick up the pieces.

Your choice.

This is true desperation something you want to avoid. Having stable cash flows is the way to go and believe it or not the wealthier one is, the more cash they hoard because they tend to take on more risks and presumedly have dealt with times where they struggled with none.

Having to withdraw money from your retirement to pay for your mortgage shouldn’t be allowed. You’ll not only loose out on future gains, you will have to struggle during the most expensive time of your life.

Why borrow against any account when you could have just had a little more cash on the side to keep you afloat?

It’s not depreciating if you’re living.

Plan out your expenses and the future ahead. If you know you need cash for some expense like a wedding or new car, selling your house is not your best bet. Always plan for it to take longer than expected.

But I get it; having cash sitting around isn’t all that fun. After your basic needs are met and 6–12 months of emergency cash is hidden in the bank, put a portion of it in CDs (certificate of deposits) that pay recurring interest for a set number of years issued by a bank or in a money-market account for short-term loans and debt instruments. It’s much more prudent than having to sell your IRA or home equity line of credit to pay for that unexpected expense you could have 100% avoided.

Be honest with your limitations. Some people can carry less cash with them such as tenured professors, billionaires or government officials with lasting pensions but most cannot. Know your expenses, income streams and the importance of cash to secure your life.

Cash is king.

#5 Debt

Debt gets a bad wrap because well, it’s debt. A debt is a loan (money you borrow) from an entity, bank, corporation, government or a person to finance something that may or may not appreciate for you while having to pay interest on top to the lender.

There are two types of debt: Good and Toxic. Both are not recommended to hold if you don’t have to but sometimes necessary to propel your wealth especially when you don’t want to wait a lifetime to earn that money yourself. Millions of millionaires can thank forms of debt, most notably a mortgage for helping build their wealth cushion. It is astonishing to read 80% of first-time home buyers put less than 10% down on a property! U.S. real estate is getting pricier by the minute. If you borrow anything you must be responsible with it and pay back the interest, principle and after that point, it will appreciate for you, not right away even paying fully in cash which isn’t always strategic as it could be invested or put on the sidelines instead.

Good debt are investments that appreciate in the future and hope to pay you back more than what you borrowed.

With student loans, you’re taking a bet on your future that you will earn more with a degree to pay that debt off or with startup funds, hoping your business scales and returns double the invested capital within a few years.

Yet compared to toxic debt, there’s no payback. Everything from consumer goods such as cars to clothes, makeup to eating out, these provide zero benefit in the long run. Sure they make memories and lasting experiences but must be weighed more wisely. They mainly make you feel good for a period of time riding on the hedonic treadmill with eventual subsequent regrets later on.

Don’t be sabotaged by the consumer society. It’s enticing and brands don’t care if you can afford it or not. I don’t see the point in AfterPay either. You can either afford it or not.

Pace yourself and know what you can afford. Don’t become allured into buying things to impress people you don’t know with money you don’t have.

Banks will charge you higher interest on your credit card debt per week than what you’re earning in your savings per year. You are their favorite customer. The one that makes the mistakes.

#6 Credit Cards

When we were younger, we were told by our personal banker to get a debit card to practice spending yet that is probably the worst piece of advice I’ve ever heard. It is worse than cash. It is digital, you can’t physically see nor feel the tangible dollar bills. You are more inclined to spend it or in this case, swipe your card.

A debit card takes money directly out of your demand deposit account a.k.a checking account. You can’t view your purchases at the end of the month nor issue refunds or check illegitimate charges if you have to. Plus to top it off, you can’t even boost your credit score also known as your FICCO score the three-digital numbers from 300–850 that are based on how prompt you pay your bills and how much of your available credit you use.

Your credit score is vital if you are looking to borrow a mortgage or some sort of loan because it gives a good indication if you are a trustworthy, reliable credit-worthy credit user able to pay back loans to the borrower.

The longer the maturity on the loan or bond, the higher the internet rate since the loaner has to take into consider the purchasing power/price, time value of money, inflationary risks, credit risk or default and lifespan of taking a bet. The higher your credit score, which is as simple as paying your bills on time and not using all your available credit from you checking account, you will be seen as a more favorable contender when it comes to borrowing a mortgage or a P2P loan from a friend if you want a lower-interest rate.

The average savings rate shot up close to 30% in 2020 along with recording less of a debt load per American as folks connected the dots to the importance of saving more than you earn and having a cash cushion which has boosted their credit scores as well.

Unfortunately strategic painful savings hasn’t lasted as the recovery has taken shape and burnout is real, credit card usage is up and the savings rate shot back down to 20% in the past few months. At least inflation is driving higher pay and there are reported higher incomes.

#7 Taxes

Last but not least, taxes — the dreaded culprit to everyone’s problems, specifically the wealthier one gets. Ironically taxes are fairly straightforward to write-off the more disposable income one has but annoying and hard to pinpoint.

Taxes are a dilemma for all earners because they eat into our earnings and frankly here in the states, we don’t always see it put to good use.

Currently the U.S. holds $20.57 trillion in debt and the number is only expanding especially in the past few weeks due to the U.S. forced evacuation and assistance in Afganistan, the freeze on student loan repayments, Haiti relief from last early August’s earthquake, climate change disasters across the U.S. on the west coast and yesterday in the east and south, 2 pumps of trillion dollar stimulus payments and most notably the infamous infrastructure package that somehow was really hard to pass.

While the rich wait for the potholes to be fixed on the highway they take to the Hamptons, they are also dealing with another dilemma, Biden’s tax hike and the possible suspension of the step-up basis, a major tax burden on inheritances.

Americans have less incentive to work during a democratic run presidency since taxes take up a larger portion of earnings. Since Republicans frankly don’t seem to care all that much about the rest of the population beside themselves, they lower taxes which benefit the rich more than the poor as they have various loopholes from deducting their expenses from their business which lowers the tax rate to owning real estate which is a tax-free machine.

Essentially any business you own, that generates profit or not has tax benefits. No wonder the rich are getting richer and the poorer are getting poorer. Regressive tax is charged on all goods, whether you generate $1m or $100k per year which eats into earnings. While the bottom 50% are struggling to get by on minimum wage as prices inflate, the rich are paying less for more and earning money in their sleep.

That’s why it’s vital to never rely on 1 income source or 2 for that matter that are positively correlated. You want a negative correlation with your investments. It is wise to have both working parents in separate unrelated industries so if one industry flops, the other will still stay. Paycheck to paycheck and W2 income will always have a tax ceiling and employee earned income is taxed at a much higher rate than earning recurring cash flow through a business venture.

When it comes to the market, same deal. The less tinkering you do with your invesmtnets, the better. If you are an options derivates active trader type of guy, you pay substantially more in taxes and earn less along with waste more time because investments sold at a gain in under a yer are subject to regular income tax or short-term capital gains. Capital gains are only applied if you sell at a gain hence the name, capital gain-selling price is larger than purchase price), after a year.

The buy and hold strategy isn’t appealing to amateur investors since they have short attention spans and don’t have the patience to cash out at 50 so they end up loosing more and paying more tax. Yet the basic, simple strategy of the 1% confirms passive investing is the way to go. Patience, dedication and persistence via allowing the market do it’s think and rebalancing less will hep you build your wealth and lessen your tax burden throughout life. An average American will pay $600K in taxes in their lifetime! That is a top 10% salary!

If the government spent less and increased taxes which means stimulus will be down to lower the debt ceiling, Americans will not only retaliate further, they will become less prudent savers and spenders. While on the other hand, the wealthy will take over the government if they have to pay more to Uncle Sam.

Although these are the most strategic and easiest ways to lessen the U.S.’s debt burden that is only rising each and every day, it is challenging and most people will always want to bounce around the system. The best thing you can do to feel less pain from giving away your hard-earned money to the IRS, and btw they will never call you that’s a scam, is to get a tax deduction by donating old clothes to the Salvation Army or Goodwill, my two spots, start a business like this blog, earn more in investment income than in your active income or become a generous philanthropist and start a foundation!

Image by Unsplash

We can all do good for the world, give back and keep our hard earned money at the same time.

Avoiding taxes is possible and legal.

I hope these strategies make sense and you can use them to guide you throughout life’s ups and downs.

What’s certain is uncertainty.

Do what no one else does now to live like no one else later.

About the author: Mia Gradelski

Hey I’m Mia, a NYU student passionate about blogging what’s on my mind all finance, tech, lifestyle-related. I'm also an investment analysis intern here at Atticus!

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