Winning With Money (The Logical Finance Guide)

by Dustin Thomason

Some people choose to dwell on the disadvantage. Others put their efforts into more productive means.

1. I set goals and didn’t tell anyone. I’ve always been a big believer in working when no one is watching- setting secret goals, executing, then surprising with the results. Common advice that I hear is to tell people your goals so that you will be accountable. Research has found that if you tell someone your goal then you get the majority of the mental benefit of having achieved the goal. If you tell someone that you’re going to run a marathon, and the dopamine release is almost the same as having already ran the marathon. Goal-sharing can be incredibly demotivating.

The ability to borrow money has made it increasingly common for people to spend beyond their means.

Lifestyle inflation is ridiculously easy trap. You have your current expenses. Then you get raise. Instead of putting that increase in income toward savings, you allow it to get eaten up in your spending.

There are 3 types of credit card users. 1. Those that use them responsibly and pay the balance in full each month. 2. Those that carry a balance and pay interest. 3. Those who think they will be a 1 but end up being a 2.

One “rule” that’s saved me a lot of money is waiting 30 days to make large, discretionary purchases.

I think about negotiating as a game. Instead of getting too serious about a negotiation,

knowing when your credit card company reports your utilization (often called statement or closing date). Say you have a $5,000 limit, you spend $4,000 each month, but you pay it off in full. If your payment date is after the closing date, the credit card company would report 80% usage rather than 0%.

Mutual Funds – These funds allow you to buy a bunch of investments at once by just buying one fund.

1) ETFs trade throughout the day, where mutual funds only have a price at the end of the day. 2) You generally buy ETF shares from another investor, but mutual funds are purchased from a fund company. 3) ETFs are almost always passive, whereas mutual funds can be active or passively managed.

My ETF allocation is the following: 30% - VOO (S&P 500 – large U.S. companies) 20% - VO (mid-sized companies) 20% - VEU (international companies) 10% - VIG (large U.S. dividend growing companies) 10% - SPEM (emerging markets) 10% - BIV (bonds)

Michael Berry wrote a paper called Regular and Irregular Motion. He determined the predictability of the path of a struck billiards ball. The path after the first impact is easy to determine with basic geometry. The second path is a bit harder, but still relatively easy. By the 9th impact Berry determined that the gravitational pull of a person standing next to the table had enough of an influence on the ball path that it was necessary to be included in the calculations.

important conderation for long term projections.