Money Matters

I’m in the process of getting my Act 22 paperwork done here in Puerto Rico (an amazing Act for US Citizens that allows you to skip Federal Income tax, and pay 0 capital gains taxes if you’re a resident of Puerto Rico) and I’ve been thinking about my finances more than normal.  Investing is a lot more fun when you won’t get your potential gains taxed away, but I’m also becoming cognizant that being sloppy with money can cause stress later in life.

I thought I would briefly talk about my personal current investment plan, so sorry if this is a boring interlude from my usual topics.  I think disclaimers are lame and unnecessary, so feel free to lose your money or get FOMO by following/not my plans.

10 years ago I made a good amount of money when I worked in the trading world (which I’ve recently slipped back into on a smaller level), and subsequently haven’t had a traditional job since.  I recognize how lucky and fortunate I was to be in that place at that time, but I did develop some bad spending and investing habits.

I read about personal finance my entire life since I was a child, but I actually never followed any of the rules.  The one traditional thing that I did, buying a condo to live in Chicago, saw me get burned even after the “market recovered”.  I’ve never invested money into an IRA/retirement, or bought and held an index fund for more than a few months.  I’ve put my money into plenty of high-risk ventures, mostly run by myself, but nothing has ever worked out to as much success as my trading efforts as a youngster.

I’ve been settling into a less expensive lifestyle and absolutely loving it.  I think that’s probably the number one thing to be done to acquire extra money.  I’ve lived a life that is 10X+ a month more expensive than I currently do, and I’m pretty sure my happiness was exactly the same.  I could comfortably live even less expensively than I do now, but I haven’t wanted to explore the edge of that just yet.

On the topic of investing I wanted to outline my current strategy.  It’s a bit random and particular to my risk tolerances, but I’m pretty happy with it.  I have 3 buckets that I want to increase on a regular basis: my personal bank account, my Betterment account, and my Bitcoin/Ethereum portfolio.

As far as my personal bank account I just want a steady state in my account.  I like having a number that psychologically makes me feel like I have a bit more than enough sitting in cash, without being too wasteful.  I naturally have some periods of higher spending (mostly due to trips) and lower.  If I start spending more than normal, I have to cut down on my investments.  This is contrary to normal investment advice, but I also put more money into my investments when I get a surplus of income.  Putting less in my investments for me is also a negative incentive, and makes me want to cut back on spending naturally without living under the thumb of a budget.

I used Betterment last year, and have started using it again.  I run their basic 90/10 stock/bond portfolio and like it.  I could replicate it in my Etrade, but for me the ease of use and extra features they have offset the pretty minimal fees.  I have a bi-monthly auto-deposit/invest, but also put some extra money in periodically.  I’ve come to terms with I’m not going to get rich quick investing in index funds like this, but it’s a good way to get rich slow while hiding money from myself.  I think about it like the best version of a long-term savings account.

Lastly I have an approximately 70/30 split in my crypto currency portfolio between Bitcoin and Ethereum.  I have a bunch of other coins as well for trading purposes, but I keep my positions relatively small in comparison.  If I didn’t trade I would just hold Bitcoin and Ether with 70% at least in Bitcoin.  Any profits from my trading activities I plan to re-invest half into Bitcoin and Ether, and the other half get cashed out for my personal account + Betterment.  If I had a different income source I would put money into these as I think they have a chance to make such a huge return that it is worth the risk that I wipe out a portion of my wealth.  I’m mentally fine with this as I put money into boring stable stuff now via Betterment.  I actively follow these markets though which adds to my personal comfort and abilities to change my thoughts if necessary.

If you also have a flexible job, want to save on taxes, and interested in coming to Puerto Rico, here is a normal day in San Juan (Isla Verde area yesterday):








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