2025 Reading: Summaries of notes & Excerpts of books (2) 學習理財ing

學習理財～是開始後不願意停的一個類別。（許是叛逆呢，不是自己專業的往往更容易喜歡）Only 5 books here, should be a short read & hopefully an enjoyable one

The intelligent investor
The simple path to wealth
Your money or your life
The psychology of money (again)
I will teach you to be rich

1. The intelligent investor
Patience, discipline, emotional control, independent thinking

Invest and not speculate: thorough analysis (understand company and stock), safety of principal (protecting against significant losses is paramount), adequate returns (aim for satisfactory not extraordinary performance) vs betting on price movements,

Align portfolio with personal situation (needs and goals)

Earnings, dividends, liquidity ratio, annuities, related hedges, short selling, return on investment capital (high ric indicate sound quality), convertible bonds, management expense ratio:

The stock market can under/overvalue companies, investors could use that and focus on the intrinsic value
Investors must periodically assess their holdings
Independent thinking and resistance to crowds irrational behavior
Maintain Regular long term investment
Mutual fund selection: managerial investment, low operation cost, low advertising
Common stock analysis: dividend rate and record, management, industry analysis, past performance (annual reports, statement of cash flow, ),
Select reputable and trustworthy financial advisors/firms : checking regulatory records, questions to ensure that ability goals reliabilities align with investor (motivation, client demographics, approaches to handling poor investment performance, transparency regarding fees and compensation,

Consider diversification based on a selection criteria

2. The simple path to wealth
debt make people focus on past pain and looming future, creates vicious cycles and destroys confidence, so avoid it
Money: to buy freedom: work, people, time,
Stop thinking what your money can buy, start thinking what it can earn (Opportunity costs)
Spend less than you earn, invest the rest using compound interest.
Market 常有起伏，但always goes up，所以長期定段投資的方法很好

3 considerations: what level of investment stage in life are you at, what level of risk can you tolerate for long term and short term, your investment horizon
3 tools: 2 index mutual funds and money, market and/or bank account, a wealth builder, hedge and cash

Keep and build wealth: fill your large and diverse basket and put in more when you can, then forget about it
Basket: btsx :a low cost index fund
(As a young investor, can be more aggressive right now)
When maturing, asset allocation might change each year, so spend a few hours per yr to reconsider
Be careful of free lunches and con men
4% rule: once 4% of your assets can cover your expenses, then consider yourself financially independent

3. Your money or your life
step1. Keep track of all income and expenses
step2. Calculate real work hourly rate, including transit/cosmetics/relaxing time afterwards/
Investment: align with my goals, consider transaction etc fees, taxes, is it easy to liquify, diversity of my portfolio, risks, capital and earnings
Your life energy & money, your values, pursuits, how you spend your time, work, leisure, life
step3. Keep monthly tabulation in all categories
step4. 以上第三步问三个问题—did I receive fulfillment to the portion of life energy spent/is this expenditure of life energy aligned with my life purpose/how might this expenditure change if I didn’t need to work for a living
step5. Make life energy visible—一张大纸画出每个月收入和支出, give you sense of progression
step6. Value your own life energy, minimize unnecessary expenses, create greater fulfillment integrity and satisfaction—每个月问step4的三个问题认识自己的真实需要, research value, quality and durability
step7. Value your life energy, Maximize your income, money is sth you trade your life energy for, trade it with integrity and passion
step8. 每个月整理自己的total worth, project monthly expenses and total income—at crossover point will be financially independent
step9. Manage your financials. Become knowledgeable and sophisticated in long term investments and income producing methods, empower yourself to make your own investment decisions.
Give away/give back/remain humble or grateful

4. The psychology of money (again)
20 chapters
No one’s crazy but many are irrational due to culture/environment/perception…
Realizing what’s enough, not to be led by avarice
Compounding
Freedom as highest form of financial capability
Wealth unspent~ savings
History offers insights but cannot predict future events and surprises
Allow room for mistakes
Consistency in 选择生活/人生重点, embrace adaptability,
There’s luck and risk

5. I will teach you to be rich
Credit score, credit report, APR(annual percentage rate)
Keep bank fees minimum: none with no minimum balance
Keep record of communication dates and content to bring back up in next conversation (with banks)
“I understand that it’s difficult but take a look at my history, I’ve been a good customer for … years, I’d like to have… fee waived. it was a mistake and it won’t happen again. what can you do to help” ~ worked several times already :)
Open 401k account & IRA (individual retirement account): for long term investment/savings
Conscious spending: know/list what’s important to you and spend on it while remaining frugal in other aspects
Set concrete goals for saving, what do you want to use it for: vacation, jewelry, savings, investments, house, education
Ask for pay raise: 提前三個月開始紀錄自己的具體表現quantify if possible/ask supervisor for a time to sit and talk about how you could excel more at your work, 一個月後即想提升鑫前兩個月找到boss並展示你從上次交流中學到的成果ask if your on the right track/what you can do to make it better, 再一個月後mention to boss that because you’ve been doing so well you’d like to discuss compensation at a meeting the next month/ask what you’d need to bring to make it a fruitful conversation (可讓同事也美言幾句), 提前兩周練習一遍這個negotiation, on the day/come in with your salary and a few from reliable websites and your list of accomplishments, 若結果很棒則fine不然問如何能更加excel at your career 或考慮換工作
很多人年薪大概=（時薪*2）*1000
Design and maintain a spending plan
When making unexpected money, spend part of it
在日用，投資，和反饋或還之後還有餘可以試圖找到spending ways
Bonds: stable and reliable though relatively lower returns than good stocks, good to have in one’s 30s and older, but can skip in 20s
Individual stocks: no for investment because too hard to find good ones
Mutual funds: easy to let others manage a basket for you but not very recommended
Index funds: good as it is going with market, only need to make it more comprehensive/adjust every 8 to 12 months
Life cycle funds: funds of other funds, offer automatical diversification, good if you’re lazy and don’t use index funds
The rule of 72: divide 72 by your return rate, and you’ll have the number of years to double your money
A model to allocate money: 30% us stock funds, 15% developed world international equities like funds from the uk/Germany/France, 5% emerging world economies like China/India/Brazil, 20% real estate funds, 15% government bonds, 15% treasury inflation protected securities

Set up emergency fund, insurance as backup not as investment, children’s education,
如果和另一半讨论金钱，由ask for advice入题了解，认真open conversation，然后如果有买东西的习惯分歧可以focus在共同目标上如旅行和买房而不是指责对方

Negotiate salary: always frame it in showing how the company will benefit, illustrate how your work will help them, tie your work to the company’s strategic goals and show your boss how you’ll make him look good, highlight how you can make his life easier by being the go to person for anything, “let’s find a way to arrive at a fair amount for both of us”.
Have another job offer and use it, but don’t mention the exact number they’re offering, so they will instead bid for you. Come to the negotiation with a plan for your role too ( the value you’re bringing to the company)

求职时，把对方的描述逐句分析加上对应的自己的经历能力，research对方公司和管理了解情况和方便后面交流，仔细写一遍cv，call一个outside council包括suggest 3 things you’d do to 增强公司的实力/目的，面试后一个个写邮件感谢
Don’t tell them your current salary, if asked, just say I’m sure we can find a number that’s fair for both of us. If pressed, push back I’m not comfortable revealing my salary so let’s move on, what else can I answer for you. If the recruit doesn’t budge, ask to speak to hiring manager
Don’t make the first offer. If asked for a number, smile and say, oh come on, that’s your job, what’s a fair number that we can both work from
If the other offer is from a mediocre company, don’t reveal the name, just mention that it’s also in what field doing what work
Don’t ask yes or no questions. 比如如果对方offer5万，不要问能不能调到5.5万，说5万is a great number to work from, we’re in the same ball part, but how can we get to 5.5 万
Never lie
When negotiating, have a repertoire of accomplishments at hand, stories about successes at previous jobs that illustrate your strengths,
Question to ask negatiator if conversation goes off track: what do you like most about this job/oh really, that’s interesting because at my last job I found…
Negotiate for more than money: bonus, stick options, flexible commuting, further education, stock options, vacations, title, 記得加入一些並不在意的東西這樣可以顯得妳有誠意when you make concessions
Confident attitude + eager to find a deal for both
“We’re pretty close, now let’s see how we can make this work”
Smile
Practice with different people
If hr doesn’t budge and you accept the offer, always give yourself negotiating opportunity down the line: “I understand you can’t offer me what I’m looking for right now, but let’s assume I do an excellent job over the next 6 months, assuming that my performance is extraordinary, I’d like to talk about renegotiating that. I think that’s fair right?” Get him to agree and get it in writing and you’re good to go
For negotiations: www.iwillteachyouto/negotiatelikeanindian/

When shopping for big items, great to compare and save more
Buy a car that will last you for 10 years, 可以在七年賣掉. 買前去網上查車未來可以值多少
Insurance, fuel efficiency, 最好在年底買車
budget- negotiate- take good care of it and maintain it well
在網上付費查詢自己想要的這款車具體所有費用加起來的價格, 告訴不同car dealers包括自己在未來兩周想要買下並知道他們會make profit 的數值，會買給自己最低價的，別人報價後把他們的最低價再告訴所有人，如果有更好的就直接買了
Keep a record of all maintenance work services and show this to buyer

Buy a house: know all the real estate terms and do all the research,
Only buy when it makes financial sense, when you’re planning to live in saw place for 10 years and more.
Think of it as a purchase not an investment, so keep it as long as possible.
20% down, 30 year fixed rate mortgage, payment each month should be in less than 30% of gross pay
Check for employer and government perks, teacher associations too