A while back I told you to ask any advisor a simple question (among others): “Do you manage your money the same way you do for clients?” I learned to love that question the hard way. At my old firm, I was pitching an in-house mutual fund I was told to push, and a prospective client asked how much of my own money was invested in it. The answer was $0, and I felt dirty for it. That moment is a big part of why Leetown exists.
So it’s only fair that I answer the question myself, in public, on the record. You get percentages and structure, not dollar amounts¹. Here’s the actual setup — the good, the bad, and the bullshit.
Cash Flow
- I spend no more than 50% of last year’s income. Everything else goes to taxes and savings, in that order². Why last year’s income? Because this year’s income is a rumor until it actually lands in the account. Business owners, you know exactly what I mean.
- My fixed expenses are only 15% of gross income. That’s absurdly low — honestly, to my own detriment³. But here’s the payoff: when your obligations are that small, every other dollar is guilt-free. I spend freely on hobbies and travel, and can be wildly generous with my money. And I don’t feel a damn thing, because the basic stuff is not a burden. However, Kelsee and I will likely be buying a house next year, and that will change some things.
- I save/invest 20–25% of gross income. This is probably more than I need, but can afford to do so given my low expenses. Plus, I just like it when *number go up*.
- One month of spending sits in cash. That’s it. Everything else is invested. Cash is a melting ice cube, and inflation is the sun. I’d rather own the freezer. I see some people with outlandish amounts sitting in cash. I will not be one of them.
- Every saved dollar currently goes into a taxable brokerage account. I do this because at this point in life I care more about liquidity and access to capital than I do tax efficiency. I can borrow against this account for a low interest rate, and my account can continue to grow. That is wildly valuable. Once I hit the target balance I have in mind, I’ll start diversifying the tax buckets like a good little planner. FYI, your target should be at least 1 year of income in this tax bucket, and even more the higher your income is.
- I automate as much as I can. Everything from payments to savings, the less decisions I have to make, the better.
Investments
- I’m invested in the exact same models as my clients. Every dollar. If it’s not good enough for my money, it sure as hell isn’t good enough for yours. I will never again stand in front of someone recommending something I wouldn’t touch.
- Investing is boring, just as it should be. No hot stock tips, no lottery tickets, no day-trading dopamine. The boring is the feature. My portfolio is supposed to fund my freedom, not entertain me — I have hobbies for that, and they’re cheaper than gambling with my future.
Business
- Leetown is the largest piece of my net worth. By a lot. Which makes me more concentrated than I’d ever allow a client to be — no one should have an asset that makes up more that 5-10% of your net worth. It’s also exactly why the savings rate is aggressive and liquid: I spent years pouring every spare dollar into getting this firm off the ground, and now I’m diversifying around my biggest asset while playing catch-up everywhere else.
- I file as an S-corp. The details are boring but the tax savings are not. Business owners: yes, we should talk about yours. The key difference- you need to be investing those tax savings, to make up for what you are not getting in Social Security credits.
Insurance
- I own $250k of life insurance I bought in my 20s. That’s all I will ever have. Not a strategy. Not minimalism. I got a rare form of kidney cancer⁵, and now no insurance company on the planet will touch me with a ten foot pole.
- Here’s the lesson, and it’s free for you because it cost me plenty: buy it while you’re healthy. Your insurability is an asset — one you don’t notice you own until the day it’s gone. And it does not come back.
- I don’t have disability insurance either. I should. The guy who lectures every high-earner about own-occupation coverage is walking around without it. Go ahead, enjoy that one⁶.
- So I self-insure by force. For most people, aggressive saving is a virtue. For me it’s the whole damn plan.
- Self employed health insurance is expensive, but worth it. My insurance company paid out 40 years worth of premiums the year I had cancer. I hate paying it, but it is definitely worth it.
Estate
- I have an estate plan. It’s stale as hell. The intent — my Leetown shares eventually going into a charitable remainder trust⁷ — exists in my head and precisely nowhere in the documents. I have big ideas for my legacy, but I actually have to execute. Easier said than done.
- It’s at the top of the fix-it list. Right where it’s been for a while. Do as I say, folks, not as I do.
There is no such thing as a perfect financial plan. Not yours, and sure as hell not mine. Perfection was never the goal. Get the big things right, know why you’re breaking the rules when you break them, and keep moving in the right direction. The rest is just noise and guilt, and neither one compounds.
Then take the money and do the only thing it’s actually for: Make Life Your Beach.
Want help getting your big things right? Reply to this email, or hit the button below to grab a time.
¹ Because my financial plan is specific to my situation, and should not be taken as gospel for everyone. Also, my compliance consultant reads these emails, and I don’t need to give her an ulcer.
² The IRS remains the most punctual bill collector in America. Rain, shine, or apocalypse.
³ My idea of a wild fixed-cost splurge is name-brand paper towels.
⁴ I wrote the damn stack. The irony is not lost on me.
⁵ The full story is coming in a future newsletter. Spoiler: I’m still here, writing footnotes out of spite.
⁶ My doctor and my own newsletter archive are now in agreement about my life choices.
⁷ More on that trust another time. It’s the good kind of loophole.
Resources
How To Avoid The Middle Class Tax Bomb
Make Life Your Beach
Memento Mori
Write Your Own Eulogy