I think I've done a reasonable job of managing my personal finances over the years. I've also made some mistakes. ## Mistakes ### 1. Spent too little time on personal finance * Budgeted 2–3 days per year from my mid-20s onwards. * Realised around age 30 that the effective hourly rate of this work was an order of magnitude higher than anything else I do. * Probably should have budgeted ~1 week FTE per year. * Counter: retail investors often do silly things when they shift away from a ‘Keep It Simple Stupid’ strategy. Spending more time _might_ have caused inverse returns, but with basic guardrails in place, I doubt it. ### 2. Did not consider my parents’ assets * I’m an only child and will inherit everything, so my parents’ portfolio has big implications for my long-term investment strategy. * Key things I realised after making this mental shift: * My parents have a house with no mortgage, so I’m long real estate by default. * A rough, very conservative estimate of the value of my inheritance materially affects my plans. * I should talk to my parents about their investment strategy. * Obvious in hindsight, but I’ve never seen this point flagged in a personal finance book. ### 3. Should have reviewed my parents’ investment strategy sooner * When we discussed this, I found major issues. * Main thing: an exploitative financial advisor, who charged high fees for bad advice, and sold them fake “socially responsible” investments. * Fixing this was an easy and big win. If I’d done it five years earlier, it would have been much better again. * My parents had received good advice on inheritance tax planning, but _ex ante_ I should have checked on this sooner as well. ### 4. Did not buy bitcoin in 2015 * In a cafe, I spent half an hour on the question "should I buy 3 bitcoin?" and decided against. * This was a mistake _ex post_ and probably _ex ante_. * Root cause: point (1) above, plus having a lower “weirdness tolerance”, and a lower trust in high-effort explicit reasoning, than I now endorse. ### 5. Accidentally became overexposed to big tech * My "bullish on AI" tilt led to much higher concentration risk than I intended. * Key mistake: I didn’t realise that 10 big tech companies are about 20% of the FTSE All-world index. ### 7. Accidentally sold a large investment due to a "take profit" instruction * The eToro buy flow encouraged me set a "take profit" instruction, and I unreflectively did so, then forgot about it. They don't warn when you're approaching that, nor even notify when the sale happens (because they suck). * This incurred a large taxable event and I missed out on 3 months of significant gains before realising the sale had happened. ### 8. Did not find a good advisor * Some people make the effort to get really good at this stuff. * Hiring a financial advisor is extremely difficult. For me, it seems easier—but still hard—to find a friend or acquaintance who is happy to share quick takes on my affairs. * I still don't have a go-to person I feel able to ask. ### 10. Did not figure out how to buy options until 2025 * I'd probably have made large gains during COVID if I’d learned this earlier. * (I plan to make at most a couple of option trades per year, investing only 1-5% of net worth.) * (I use Tastytrade. Other platforms may be better for you; French residence constrains my options.) ### 11. Did not select investment platforms carefully enough * Once you make investments on a platform, you usually can’t transfer the investments to another platform without selling them first, which incurs a taxable event that you probably don't want. * This means strong lock-in effects. * I should have been way more careful about evaluating investment platforms before signing up. * Warning for the reader: eToro is horrible. Don't do it. Basically everything on this list is downstream of (1), so the main takeaway is that I should continue spending more time on personal finance than I want to. Ugh. ### 12. Something I have not realised yet * It’s easy to mess up personal finance. My approach is now more complicated than I'd like it to be. Some candidates: * Macro-strategy: I recently shifted away from a simple "heavy equities, mostly index funds" [lifecycle investing](https://www.lifecycleinvesting.net/) approach towards a more conservative [Barbell](https://www.investopedia.com/articles/investing/013114/barbell-investment-strategy.asp) approach. * I considered this carefully, but didn't consult expert acquaintances. I can imagine later thinking this was a major mistake _ex ante_ and _ex post_. * Taxes: I dunno man. I live in France. I own two UK companies. Blah. * Inflation hedging: I've not really sorted this. On the list for the next review. * Location: superficially, France is much cheaper than Iceland. But raising children may be cheaper in Iceland, due to their very generous support for parents. Taxes are lower and if I end up forced to run a company domiciled in France that'd be awful. ## Possible mistakes ### 1. Not charging more * Charging high rates for coaching and consulting is good for my finances, and I like that it forces people to have a high bar for "is this worth it?". * Perhaps I should double my rates. C.f. Patio 11. ### 2. My Giving What We Can pledge - It's a major drag on my personal finances, but clearly <10% of my total impact so far. - I'm now unsure if it's even net positive for my total impact. - It doesn't pass the status quo reversal test. ### 3. Did not prioritise getting rich in my 20s * Even from a perspective that is more "hardcore-altruist" than my own, there’s a strong case for getting rich in your 20s. I underrated this, because I didn't sufficiently weigh things like: * You learn a lot along the path to getting rich: lots of great feedback loops. In the nonprofit world, feedback loops are worse. * Social and financial capital is useful! * Usually, most of your impact comes in mid and late career. * It's very expensive to get a good apartment within walking distance of your office in global hub areas like the Bay Area and London. * Being rich helps you find a great life partner. * Childcare is very expensive, but it's crucial if you want to be ambitious about your career while raising a family. * _Ex post_ things worked out well, because 80,000 Hours was an outlier success. _Ex ante_, perhaps I made the wrong call. ### 4. Living alone * When single I mostly live alone. This is expensive. I'm naturally drawn to it, but it may be net-bad for my wellbeing and social capital. ### 5. I don't use math * Fractional-kelly, price:earnings, risk premium, blah. * In my case, I think that getting into this stuff would be "overcomplicating it" and low-return. Maybe I'm wrong about that, especially now that ChatGPT can help. ### 6. Unhelpful background anxiety * I am very fortunate, and very financially secure. I never lose sleep over financial stuff. For the most part, I think about this stuff just once per quarter. * But, I still wonder if financial considerations influence my decisions about what to work on, and especially where to live, much more than they should. ### 7. Unnecessarily forgoing income / not seeking more grants * I took a very low salary in year 1 of TYPE III AUDIO, so that I could buy more time from other team members. Ex post bad, maybe ex ante too. * Last 1-2 years I've done several months of unpaid work, for which I could perhaps have sought grant funding. I have a big ugh field around seeking grant funding. * In FTX times, a few nudges from acquaintances led to grant funding for months of work I'd otherwise have done unpaid, or not done at all. ### 8. Ramped up thematic tilt too slowly * Began a thematic tilt towards "bullish on AI" in 2019 but ramped up pretty slowly. * Something like a 2x faster ramp-up might have made sense. ### 9. Did not properly consider locking in a fixed-rate mortgage during COVID * Rates were historically low; I could have locked in for 30 years. * Considered it for an hour and dismissed it due to a sense that it’d mean several full-time weeks of faff. * I should have actually bothered to estimate the numbers, and the effective hourly rate of that faff. * I guess I got the right answer anyway, but not by the right process. ### 10. Read Nietzsche and Schopenhauer in 2010, rather than LessWrong * Was it worth it? All things considered yes. Financially, unclear.