A Thanksgiving Checklist

There are many reasons to be thankful this Thanksgiving. I am thankful to have a loving family, and my health to be able to support them, be with them and enjoy my life near them. Every year there are a few items that I go over to make sure my family and I are in the best shape either financially, physically and emotionally. This list might help you

Retirement and investments:
- Tax advantaged accounts:
  - Max out 401K
  - Perform a Roth IRA backdoor
  - Max out your HSA
- Rebalance
- Do a financial checkup and review your credit reports
- Evaluate your debt (student loan, mortgage, credit card), If your APR is larger than 3% pay them off
Insurance: Make sure all of your insurances are in place to protect your assets
- Insurances for home (homeowner or renter)
- Car insurance (do you need that full coverage or can you downgrade to a great liability insurance)
- Life insurance (You don’t need to set your life insurance to 10X of your salary, as long as your life insurance covers your liabilities like mortgage and gets you 2X or 3X your income you are in a great shape)
Will and Estate Planning :
- Check your beneficiaries on all of your individual accounts , add your spouse to all accounts as the beneficiary and make sure you have contingent and secondary beneficiaries
- Review your will and make sure it is up to date, maybe set up a living trust, a document for your end of life decision and power of attorney
Donate: it is thanks giving after all
Do micro optimization:
- Check your emergency fund, is it too large?
- do you have an automated dollar cost averaging strategy
- is your HSA allocation correct?
- Review your account reports and see if there is any item you don’t recognize.
- Reduce your bills,
Tax Planning:
- Put together TAX documents and a file
- Talk to your tax preparer
Budgetting:
- Increase your budget for travel
Health and mental health
- Schedule your annual physical, dental cleaning and checkup, eye exam, lab work, fitness test
- Sign up for a gym if you don’t have one
- Mental health: what is your hobby this year? what classes are you taking?

FU money over FIRE money any day

I love my career, in other words, I am a very happy rat in this boring rat race. For a while I was wondering what would I be doing if I hit FIRE and don’t ever need to work anymore. To be honest that life would be meaningless to me, I wake up thinking about challenging problems and I go to bed thinking about them. I love the intellectual challenges. You know, vacationing more than two weeks actually makes me bored. But so does not vacationing for more than three months. I like the balance. I just don’t want to get stuck in either work or vacation. I like to have the flexibility of experiencing both.

That said, my career hasn’t been always fulfilling. At times I had faced real morons as my bosses, or been in toxic situations that I wanted to get out of. And because I did not have the financial means, I had to stay longer in those situations than I wanted to. I honestly think bad situations at work lowers your IQ and I avoid them religiously. You should too.

That’s why the following video by JL Collins resonated. My wife and I live on an annual expense of $110K and my FU money is having twice that (I am not bragging but we have surpassed that many years ago). Meaning that I can quit my job, go do nothing for two years but vacationing in Sydney, Lisbon and Singapore, maintain my current life style and still come back with all my retirement and house equity intact. This is the worst case scenario which assumes both myself and my wife quit at the same time which is extremely unlikely. But again if that happens, our current assets can easily support us for 4 or 5 years. Because we have reached our FU money.

I don’t need to retire, I just need to sleep thinking that if I lose my job I can still wake up happy and content. I take that over an eternity of frugality and FIRE lifestyle any day.

FIRE Automation Steps: Dollar Cost Averaging using Vanguard

One of the questions that is probably on your mind is how can I get the most out of my by weekly paycheck?

One great solution is to ask your employer to direct deposit it in a high yield saving like Ally, American Express or Discover savings and collect a 2% interest. This by itself is a $2,000 free money on a cash reserve of $100k that most people keep in their savings anyways.

My wife an I did not have a high yield savings account and I looked into whether or not I should open one. The plan was for our salaries to go into a high yield saving from American Express and then from there for us to deposit it to various investment accounts or pay our mortgage and bills. This is still on my todo list. We have an account with First Republic that is a relatively local bank and we are happy with their 0 international fee ATM cards. However their savings account gives us peanuts compared to any of the online banks.

We however religiously do a dollar cost averaging through Vanguare, we feel this is more appropriate for us. Our salaries go directly to our First Republic account and then every week Vanguard takes $1,250 out of it and invests in VTSAX (VTI is more tax efficient but I have not figured out how to automatically invest in VTI). That way we can get a dollar cost averaging benefit and also not manually modify our strategy.

You can set it up very easily by going to

My accounts > Account maintenance > Automatic Investments

And setting it up to deduct weekly cash from your bank and invest into a Vanguard mutual fund.

I am personally comfortable doing a weekly investment in VTSAX and do not feel the need to diversify that further. I am slightly bothered that I cannot invest into VTI directly and I hope there is some way to correct that. The only remaining optimization is for me to move our cash reserve to an online savings account to get that $2K funny money back from our bank.

Why you should automate your HSA investment

We talked about HSA accounts and why you should have one. If you still need more convincing you can look into my other post “What is an HSA anyways“.

When it comes to investing, automation is your best bet. You should automate your investment so 1) you cannot fiddle with it too much and as a result get a better return, that’s why dead investors often outperform active investors. 2) you want to spend your precious time on family or on yourself, you shouldn’t constantly be on a call with Vanguard or some other bank.

My HSA used to be a mess. Every two weeks I had to log into my account, rebalance, and move my excess money to the investment part of my account. It took me a few months to realize that my bank can automatically take any new deposits from my employer and transfer them to my pre-determined diversified portfolio.

If you have not done this yet, you should stop what you are doing, log into your HSA account and automate investments.