One of the highest leverage skills you can have is learning to be good with money and personal finance.

The earlier you practice good habits, the more time you give it to compound.

But it’s tricky!

There is typically no formal or even informal education on the topic, and most people end up getting pretty far in their professional career without any kind of foundation in personal finance.

My goal for today’s post is to give you the quick hits of what I teach… a 5-minute read with ten quick tips to follow.

Do these and you will be better at personal finance than most people.

There are very few absolute rules in personal finance, but this is one of them.

The closest thing you will find to “free money” in this universe is the employer match of your 401k plan at work.

Always contribute enough dollars to your 401k plan at work to maximize the amount of “free dollars” your employer will match and deposit into your account.

While this sounds like obvious advice, most people don’t do this.

At my last startup Teachable, a full half of the employees were not contributing enough to get the full completely free match from the business!

I’m working on a detailed guest post next week on how to best leverage credit card points to book travel in style.

But until then, use this strategy:

Always transfer out your credit card points to travel partners instead of booking directly on the credit card provider website.

Search for travel on the loyalty program of the airlines or hotels directly. Only when you find a good deal, use the “Transfer” feature to unlock much better value than booking directly on the credit card website.

And stay tuned for the full, juicy post on this in a few days 👀

If you pay high taxes, you are likely leaving money on the table by using a high-yield savings account (HYSA).

Even though a HYSA may pay a yield of 3%-4%, you pay full federal and state taxes on the interest!

Most people can likely save money by investing in a money market fund instead, particularly one with tax benefits.

A money market fund is a type of mutual fund designed to be a conservative place to keep your cash.

Special types of money market funds exist that confer special tax benefits — like treasury money market funds that don’t pay state or local taxes and muni money market funds don’t pay federal taxes.

You can read this article to learn how to do this yourself, or consider using a product that does it for you automatically like Smart Yield.

This screen is designed purely to scam people and take advantage of unknowledgeable travelers that don’t know better:

Whenever you face this choice, you are always better off hitting “Decline Conversion” and paying in the local currency.

Otherwise, you get charged a wholly unnecessary fee by the ATM or credit card terminal in foreign countries.

The more you know!

One of my favorite personal finance hacks is setting up a private one person 401k (called a Solo 401k) with any kind of side hustle income.

I wrote a very detailed post on exactly why the Solo 401k is the most powerful retirement account in America, but anyone who makes even a little bit of money on the side is eligible to start one and take advantage of its awesome features.

In addition to contributing money from your side hustle, you can move in most other retirement plan dollars into the plan to invest it in almost any asset you like.

The growth inside the account is tax-free and you can use it to unlock a mega backdoor Roth IRA and build tax-free wealth.

Nothing hurts your finances more than expensive and painful short-term debt.

A little known hack: if you need to borrow money, you can technically borrow up to 50% of your 401k account value to a maximum of $50,000 at any time, for any reason.

You and your spouse could likely both do this simultaneously for a combined maximum of $100,000.

You have to pay a market interest rate, but instead of paying a bank, the interest goes right back inside your account!

The tricky part here is if you lose your job you could be forced to pay the whole thing back at once.

However, if you work for yourself and have a Solo 401k, you don’t face that risk!

In fact, you could even roll over other retirement accounts into the Solo 401k so you can borrow against it.

The most reliable way of investing is to simply index the stock market instead of picking individual stocks.

However, once you start having 6 figures or more in the stock market, it may be worth looking into direct indexing instead of buying a single index fund.

Direct indexing refers to buying every single company in the index individually… which sounds completely insane but it makes a lot of sense if you have a program do it for you automatically!

Since you own every single company, even if the index goes up on average, more individual companies may be down, which gives you more usable tax losses that you can use to offset other gains.

The upshot of a direct indexing strategy is you get the same performance as investing in an index fund with far more tax benefit — including potentially 40% of your initial investment as a usable tax loss.

You can read more about how I set it up here.

A Roth IRA is a phenomenal wealth building account — you put in post-tax dollars, but you then never pay another dollar of taxes on it.

And, you can withdraw your contributions at any time!

One of the coolest gifts you can give your children is getting their Roth IRA going when they are still very young.

The difference between maxing out a Roth IRA starting at age 13 vs age 21 is an extra 15 million dollars at retirement!

The challenge with a Roth IRA is you can only contribute “earned income” into the business.

You need to wait until your kids are old enough to earn some money on the side, and then you can open a custodial Roth IRA in their name and contribute the earnings up to a maximum of $7,000 a year.

Get this started as young as you can! If you are a business owner, see if you can find a way to (legitimately) employ them for your business.

Most people don’t realize that the most tax-advantaged account in America is a Health Savings Account (HSA).

An HSA is the only account type with three separate tax benefits:

And at age 65, you can withdraw the contributions for any reason at all!

The most remarkable feature of an HSA is — as long as you store the receipts from paying healthcare expenses out of pocket, you can reimburse yourself at any point in the future… even decades later!

If you can afford it, here’s how to maximize the power of an HSA:

1 - Pay healthcare expenses out of pocket with a credit card (keeping the credit card points)

2 - Store the receipts for all these healthcare expenses somewhere

3 - Invest your HSA dollars and let them grow and compound for a very long time

4 - Whenever you need cash, reimburse yourself from your HSA… ideally, decades later!

A Roth IRA confers such a generous tax benefit that the government has tried to put in restrictions to limit who can actually contribute to one.

If you make over $150,000 single or $236,000 married, you cannot directly contribute to a Roth IRA anymore.

However, there are at least 4 separate workarounds for high income earners to still contribute to a Roth IRA! So if you know what you are doing, these limits will not apply to you.

Here are the 4 workarounds:

You can read The High Earners Guide to a Roth IRA to learn about exactly hpw to leverage these.

Reader question: If you had to think of one addition to this list, what would it be? Leave a comment or reply to this email.

And I’ll be in your inbox next week with the Silly Money guide on how to optimize your credit card points.

P.S. I’m also teaching a free workshop tomorrow on How to Maximize Your Earnings on Cash if you want to learn more about money market funds.