Matt 💰 Personal Finance + Investing

Follow @mattthemoneyguy for DAILY content just like this 🙂 If you’re new here, I’m a 27-year old finishing up my MBA who started this page to help teach people about the same money concepts I struggled with when I first started working and earning money. The reality is that most people don’t learn how to handle their money growing up (or sometimes even worse - they learn bad habits). It’s not a natural skill (even for me!) and it takes time to learn. My idea was that if I post a tiny lesson or piece of motivation each day, if someone follows me, they will be able to learn these things seamlessly as they scroll. This page has evolved a LOT since I started, but that general idea has remained the same. Today I realized that I have hit 50 MILLION content impressions since I started this page (yes, I’m a data nerd and record this stuff in detail lol). That’s honestly hard to even fathom, but it gives me confidence in one thing - I’ve probably taught at least SOMEONE about money. Social media can get very annoying with haters / trolls in comment sections, but when I zoom out and focus on the positive feedback from you all, it’s a lot easier to stay focused on continuing to create good content to help others learn. This is all to say thank you for being a part of the community here and cheers to continuing to grow and help educate more people on how to manage their money! - Matt #mattthemoneyguy #money #investing #personalfinance #stocks #bonds #debt #etf #mutualfund

You'd think it would be hard to explain how to get rich in just a single-slide Instagram post, but this is IT. In reality, there are a LOT of ways to get rich. You can start a business, you can get lucky with a stock or in the lottery, you can work your way up to be a big wig CEO, or it can be handed to you when you're born. No shade to any of those ways, but many of us aren't really in a position to do any of those. Furthermore, those all have a WAY higher failure rate than success rate. This method, however, is tried and true. Investing in the market over a LONG time has gotten millions and millions of people rich over the last century, and right now its easier to do than ever. It may not be as sexy as some of the other options I listed, but it'll do the job much more reliably. Investing can be intimidating if it's new to you, but it's really not as complicated as it may seem. If the steps on here scare you, take a day and research each one. Learn about Vanguard and Fidelity, understand what the different account types are, research index funds, and understand why they do so well over the long term. You may kick yourself for not starting earlier, but imagine how upset you'll be in 20 years if you haven't started. This is your signal to start now! - Matt #MatttheMoneyGuy #personalfinance #money #investing #mutualfund #etf #stock #bond

How much do YOU need to retire?! This is an example of some basic retirement math. It's not going to be a pinpoint plan, but it is the "back of the envelope" method of what you need to retire. The idea here is that after you deduct any fixed income in retirement (most commonly social security or a pension), you will need your investments to cover the rest of your expenses. In this case, that is $42k (in today's dollars) of expenses that Jim needs to cover. To figure out how much is needed to be invested to cover that extra amount, we will reference The Trinity Study, a retirement study conducted that coined the famous "4% rule." This is a rule that was born out of simulations of a BUNCH of different retirement portfolios and determined that you can safely withdraw 4% from a portfolio mixed of stocks and bonds and it will last you through an average retirement length. Why can't we withdraw 10% since that's what the market has averaged over a long period of time? I wish this was true, but that will unfortunately leave you broke in retirement before you die. The unfortunate reality is that due to stock market volatility, you can't withdraw the full 10% average because on down years, you would withdraw WAY too much and it would drawdown your portfolio at an unsustainable level. Imagine you have $1m and need $100k per year to survive. If the market crashes (like it always does in cycles) and your portfolio is now $600k, you're withdrawing a sixth of your total retirement savings in one year now. When withdraw rates higher than 4% were tested over several decade periods, they had very high failure rates (not something you want to deal with in retirement). Like I said, this isn't going to be a bonified retirement plan, but this will get you a decent starting point for what you need! - Matt P.S. Do you want to see how I'm investing my money to reach early retirement? Comment "link" and I'll send you an app where you can track my portfolio for free! #MatttheMoneyGuy #retirement #money #personalfinance #investing #stocks #bonds

One more free no-regret move: comment "newsletter" and I'll send you a link to subscribe to my Money Monday newsletter! Seriously though, when people ask me for personal finance tips, these are some of the first "quick wins" I have to offer. Personal finance is VERY personal and there are very few things that can be applied to everyone, but I would say these are a few examples where I can say with confidence that there is very little reason NOT to do them. A no-regret move, so to speak 😉 Sometimes when you want to get your finances in order, you need some quick things to get your confidence up and feel like you're making changes. Things like protecting yourself (freezing credit score, making a will), getting systems set up (auto-investments, getting your company match), and having the right accounts (HYSA, IRA, etc.) can make SUCH a huge difference. This could all be done over the course of a few days. The no-regret list is called as such because there is really no downside to any of these items. Sure, they won't make you rich over night, but they will help protect you and get you on the right track. I can tell you one thing for sure - you might regret NOT doing some of these things! - Matt #MatttheMoneyGuy #personalfinance #money #investing #cash #hysa #stocks #bonds #etfs

If there is one thing I CONSISTNELY catch flack for, it's my assumption around market returns on investments. Give me a chance to explain myself! I typically use 10% when I calculate scenarios for long term investments, and here's why: 1️⃣ 10% is the VERY long term average NOMINAL return of the market (meaning BEFORE inflation). You can see for virtually all of the trailing time frames in the last 100 years, the market has returned an AVERAGE of 10% or more (~7-8 post inflation) 2️⃣ The reason I still use the 10% nominal return is that wages also experience inflation. If I make a scenario where someone invests $500 a month for 40 years, that $500 will INCREASE with inflation. If you're investing $500 a month now, there is a VERY high chance that in 10 years you will be investing more than that if you experience any wage inflation 3️⃣ Wages and consumer inflation don't move 1 to 1, but between wage inflation in the SAME job and personal growth in earnings potential (e.g., you learning and becoming more valuable over time), MOST people experience increases in earnings that outpace inflation. If I were to use real returns of 7%, I would also have to build in this increase in your contributions (which is more difficult in a single IG post than just assuming constant contributions) 4️⃣ But I thought past returns don't predict future returns? Well, kind of. For individual securities this is certainly the case - there is a lot of specific risk that can sway performance to differ from the past. I wouldn't count on 10,000% NVDA returns in the future. But if you buy an index fund and own the whole economy, past returns are the best estimate we have for the future growth of the entire economy. When we look at how the market assigns a risk premium to capital invested in the equity of a total economy, it has appeared to stay RELATIVELY constant over long periods. Keep in mind, my scenarios are ESTIMATES to show realistic possibilities of what your investments COULD yield. The only certainty I can give you is that you WILL be better off investing over the long term than not 🙂 - Matt #MatttheMoneyGuy #investing #personalfinance #money #stocks #sp500

Are you able to distinguish all of these?! Here are a few questions I hear ALL the time that don't make sense: • Should I invest in a Roth or a 401(k)? • Are stocks a better investment than a 401(k) • Should I invest in an ETF or an index fund? ... along with any variation you can think of of the above terms! It's CONFUSING when you get started and I'm not shaming anyone who asks those, but if you find yourself not knowing the difference between tax structures, account types, assets classes, and investment vehicles / fund types, I encourage you to take a few minutes to learn about the differences! Tax treatments can be different for the same account type (for example, both Roth and Traditional tax treatment is a common option for a 401(k)) and oftentimes you can hold the same investments in many different accounts (e.g., buying stocks in a brokerage vs. an IRA). Understanding these connections will become more and more important as you build wealth and make moves to optimize your taxes. Hopefully this list can serve as a starting point to make the distinction between some of these different terms! - Matt #MatttheMoneyGuy #personalfinance #roth #taxes #etfs #mutalfunds #money #investing

Every dollar your earned should be invested in something! This post is a personal philosophy that I've found to be very helpful for my spending decisions, so I wanted to share it with you all. It might sound ridiculous to say that *every* dollar you spend should be an investment, but I really do think it's possible. Small purchases every day like a coffee out can be an investment in your mental wellbeing and convenience. A drink out with friends can be an investment in your happiness and social life. A video game can be an investment in your relaxation. I think you get the point. You might be saying that you could use this justification for ANY purchase, and I think you'd be right. That's because we all value different things, and that's the great part about personal finance - we should find ways to invest our money in things WE care about. That's how we can leverage our earnings to actually enjoy life. What doesn't fit into the "investment" category? Well, that will depend on what doesn't matter to you. For me, something like going out to a club and getting a table, or fancy things like expensive watches / wallets. Those don't matter at all to me, and if I were to buy them, they would purely be out of pressure from others. That's not an investment in anything that benefits me (although those same items might contribute to your happiness, and that is OKAY). If it wasn't clear, this post is about spending with intentionality. If you spend intentionally, it will be on things that contribute (in some form or fashion) to your wellbeing. Focus on those things and avoid things that don't matter to you! - Matt P.S. If you want to see how I invest in my financial future, I post my investment portfolio on a free social media app. Comment "link" and I'll send you the link to see exactly how I invest in my finances! #MatttheMoneyGuy #money #investing #personalfinance #debt #travel #gym #stocks #bonds

For the love of all things personal finance, PLEASE take advantage of your employer 401(k) match! This is part of your compensation, so if you don't take advantage of it, you're literally giving yourself a pay cut. If you're like Felix, you ignored it for your whole career and it cost you almost ONE MILLION DOLLARS. It seems small, I get it. If you make $70k and get a 4% match, that equates to your employer contributing $2,800 per year to your 401(k). It might sound small enough for you to ignore (although I think ignoring any free money is a bad idea...). But you know that thing we always talk about called "compound growth"? This is a GREAT example of that. That extra money your employer contributes each year will continue to grow and grow. Over the course of your working career, it can end up being A LOT. 401(k)s do have restrictions, but that is not a good reason to ignore them. There are SEVERAL ways to access the money in your 401(k) if you make so much money that you want to retire early. Maximize your dollars now and you will be rewarded down the line, I promise! Take your employer 401(k) (or 403(b)) match people. Don't give yourself a voluntary pay cut! - Matt #MatttheMoneyGuy #investing #money #personalfinance #retirement #compounding #stocks #bonds

Imagine this - you buy your first home, excited to start building equity, and you get your first mortgage statement and realize it's 88% interest?!? Not so exciting! Why is that though? This is fun little quirk is a function of how the loan is amortized (a word for the regular payments scheduled towards your mortgage). Mortgages are amortized so that your payment is equal every month throughout the course of the loan. Mortgage interest is calculated based on the total loan balance (e.g., if you have $300k outstanding, the interest is on that full $300k). Because of this, when your loan balance is still high in the beginning, the payment ends up being mostly comprised of interest payments. The system makes sense, but it does create some disadvantages (or opportunities, if you're a glass half full type of person) for the home owner. If you don't own the home for very long, say 5 years, you will have built up very little equity in your home. This means if you move and sell your house, you will still have a fairly large balance to pay off. The opportunity, however, is that making extra payments towards your mortgage in the beginning of the loan term (assuming your lender will let you) will make a HUGE difference. Those extra payments can go 100% to equity, unlike your standard payment. If you have a 7%+ mortgage interest rate, this might make a lot of sense. If you're one of the lucky ones who got a mortgage that was 3-5%, you probably don't need to rush to do this. Buying a home can be a great decision if you are staying somewhere for the long term, but make sure you understand how your mortgage works! - Matt P.S. I'm sending out a guide on how to start investing with Fidelity this Monday in my newsletter. Comment "newsletter" and I'll send you a link to sign up! #MatttheMoneyGuy #investing #realestate #money #personalfinance #loans #debt #mortgage

As someone in a long-term relationship, I can honestly tell you some of the MOST SPECIAL memories I have with my girlfriend didn't cost much at all! This isn't to rag on you if you enjoy an expensive dinner, but rather to make you feel better if the expensive dinner and gifts will stress you out. My view is that Valentine's day (and any other holiday with your partner, for that matter) should be about you and your relationship, NOT how much money you spend! I LOVE cooking because I can choose what to make, make sure it's perfect for US, and turn the process of cooking into part of the date. Play some music, have some wine, the whole 9-yards. A special, home-cooked meal + flowers, a few stories about some of our favorite memories, and a movie and snacks after is the perfect night for me, and it costs relatively nothing. On the flip side, I've had awful nights when I spent $50 on Ubers, $150 on dinner, and $100+ on gifts. To me, the added spending adds to the expectations which often don't pan out. Some people may derive happiness from those displays of affection, but I find myself to be way happier taking the pressure off and focusing on US. My partner and I are both on board with this, and we always have a great time celebrating together without any expectation of spending. No shame if you do like to spend more money on Valentine's Day, I just don't think it's necessary to do something special! - Matt P.S. The BEST Valentine's Day gift is a subscription to Money Mondays, my newsletter. Also won't break the bank because it's free. Comment "newsletter" and I'll send you a link to sign up (warning: I probably wouldn't actually include this for a Valentine's Day gift, they might dump you. But you should still sign up!). #MatttheMoneyGuy #valentinesday #personalfinance #money #investing #love #celebrate

There's no one answer to the question "how do I allocate my assets?" but there are some guidelines you should know! What you see right here is what I would characterize as a slightly modified Boglehead portfolio. John Bogle (who went by Jack Bogle) was the founder of Vanguard and the father of modern index investing. He's developed an online fan base called the "Bogleheads" who more or less collectively agree on the above. Fun fact - Jack Bogle actually didn't believe in the international portion that most modern-day Bogleheads include in their portfolios. Here's the gist of it: 1️⃣ Get a buffer of cash for your emergency fund and any major expenses you have coming up. After that, invest the rest 2️⃣ Within your investments, you mainly split them between stocks and bonds. Stocks should be 60-80% U.S. index funds, 20-40% international index funds. The international portion is slightly controversial, but I'm a proponent of it (maybe a topic for a separate post). 3️⃣ Bonds should be introduced slowly as you age. There is also a bit of controversy around how fast or slowly you do that. A rough rule is your age - 20 = your bond allocation in %. This is conservative, and I'd be hypocritical to not disclose that I don't follow this to a tee myself. Everyone will feel different around the EXACT speed at which you incorporate bonds. This is a general rule, but you may choose to be more aggressive by maintaining a higher stock allocation for longer (as I do). 4️⃣ If you choose, I think it's okay to allocate some of your portfolio to things like crypto or individual stocks. This isn't something all Bogleheads do, but I think it allows people to scratch the speculation itch. I personally have about 4% of my net worth in BTC and ETH. I wouldn't want it to get much above that. This isn't THE way to allocate your assets, its just A way. But it's a pretty good starting point for you to internalize, and you can always adjust as you learn more about your preferences. - Matt P.S. If you want to learn more about these topics, comment "newsletter" and I'll send you a link to sign up for my newsletter! #MatttheMoneyGuy #money #investing #personalfinance #stocks #bonds

This is one of the MOST confusing things to new investors, and for good reason! There are SO MANY different funds out there. It's nearly impossible to understand which one is the "best." To add to the confusion, a lot of these firms market to tell you why they are the best. It leaves you feeling like you made the wrong decision no matter what broker or fund you choose! I'll tell you a little secret though - if you're buying low cost passive funds, it really doesn't matter. They are all more or less the same. That's because index investing doesn't rely on someone choosing the stocks/bonds in the fund, it just tracks a set index (hence the name "index fund"). Sure, there might be slight variance in the rebalancing of the underlying assets, a few basis point difference in the fee (a basis point is one hundredth of one percent for those who haven't heard the term), and maybe slight differences in the classification of indexes like "total market." Those are all VERY tiny differences - the overall performance will not be noticeably different. I mean this when I say this, every single row on this page is effectively the same. If you're investing with one of these brokers already, you'll be totally fine picking their versions of these funds. If you're starting from scratch, I have a slight preference towards Vanguard and Fidelity, but purely due to their size and track records of being high integrity firms. That is all relative because these firms are all huge and have good track records. If you aren't investing because you can't decide which firm to start with, hopefully this post puts some of your fears to rest! - Matt P.S. If you do want an example of an index fund portfolio, comment "link" and I'll send you a link to track my portfolio for free! #MatttheMoneyGuy #invest #money #indexfund #stocks #bonds #vtsax