1 of 10

Financial Advice

Not licensed

2 of 10

Have a goal

Important to have a long term goal.

Let’s start with “Buy a house”.

You will need:

  • Money for a deposit. That is 20% of purchase price. In LA that’s between $100k to $200k.
  • Credit score above 740
  • Proof you can make payments
  • Good debt-to-income ratio (basically, no debts you can’t afford)

​

3 of 10

Save money

  • Cancel your credit cards now
    • If you can be trusted, just put hard limit on your card to your “disposable income” amount.
  • What are your fixed expenses per month?
    • Rent
    • Car
    • Gas
    • Food
    • Phone/Cable
    • Tax
  • Income subtract fixed expenses = Disposable income
    • Save 20% of your disposable income
  • Free money:
    • Don’t pay any fees on anything (like bank accounts).
    • I use this bank: https://share.onefinance.com/invite/DrewB/fbb09634
    • Cancel subscriptions
    • Sell things you don’t need

4 of 10

Put your money in buckets

  • You want 3 buckets. Use your payroll company to pay these directly into the separate accounts!
    • #1. Fixed expenses (I use onefinance.com’s “pockets”)
      • Or BoA “Advantage Plus” with direct deposit from Gusto to avoid fee.
      • Ally.com is another option.
    • #2. Savings (Barclays.com - Old school, but by choice - inconvenient to withdraw from)
      • Robinhood.com is a more tech-savvy option to use as a savings account (and can do stock investing too).
      • Betterment.com also has a “high yield” savings account that is good.
    • #3. Disposable income (onefinance.com “Spend Pocket”)
  • 2% is a good interest rate today.
  • Whatever you do, no fee accounts!
  • Ideally figure out a way to put $2000 into your savings immediately.
    • Ebay something
    • Extra work (or next bonus or pay raise)

5 of 10

Debts and Credit

  • You want to be above 740.
  • Use creditkarma.com to check your score. Enable email monitoring.
  • Think about refinancing student loans.
    • Always use government programs, not private lenders.
    • Talk to me (drew@funkhaus.us).
  • Cancel your credit cards now.
    • If you can be trusted, just put a “hard limit” on your card to your “disposable income” amount.
  • Small credit card plus a car payment is enough to build good credit.
  • No fee cards!
    • I recommend Blue Sky by American Express.
    • If you have to do a secured card for your first card, do a small $500 one.
  • Do not carry a balance - pay to $0 each month. Do not miss a payment ever!

​

6 of 10

Car payments

  • I prefer a car lease over a loan payment
    • Entire payment is a tax deduction if you can justify it for work?
  • Always in warranty.
  • New car every 3 years.
  • Never pay more than $0 down (or as close as possible).
  • 10k miles is the minimum you need. More is better.
  • Just shop around. Try to do deal over email if you can.
    • Fair.com is interesting, but car probably not in warranty.
  • No you don’t need any of the extra things they will try to sell you.

7 of 10

Retirement accounts

  • IRA
    • Payments are tax deductions, pay tax when you withdraw.
  • Roth IRA
    • Payments aren’t tax deductions, don’t pay tax when you withdraw.
    • This is in general the best kind for young people.
  • 401K
    • Reduces your taxable income, pay a penalty if you take money out before 55.
  • Use Betterment.com to setup IRAs.

8 of 10

Investing

  • You probably don’t want to do this. You aren't smart enough.
    • Better to let robots do it!
  • If you understand the risk, Betterment.com is great for long term upside.
  • Betterment.com is good for a Roth IRA
  • If you do want to do it yourself:
    • Figure out what your edge is. Are you smarter than my friend Marcus who works 24/7 at a hedge fund?
    • Be in it for long term! Time in the market, not timing the market.
    • I use robinhood.com. No fees!
    • Only invest what you are willing to loose.
  • motleyfool.com is a great resource
    • In general, pick big companies with good financials, a large moat, good management, and hold for at least 3-5 years with a diversified portfolio (not same companies or industries) of at least 12 positions. Good resources for how to pick these companies and this approach generally is motley fool
  • Bitcoin is gambling.

​

9 of 10

Tax

  • Figure out your “effective tax rate”
    • This will help.
    • In general, 25% is a good rule.
    • Of all money you earn, 25% will be taken from you as tax.
  • Income subtract tax deductions, what is left is taxed.
  • Talk to an accountant about what deductions you can claim.
    • Don’t need to keep receipts, use onefinance.com to categorize expenses. Or use Amex statements at end of year for things like movie tickets etc...

10 of 10

Accountant

We use:

John San Agustin�morling.com�