What are these tools?!?!?!

Here is the high-level thinking about financial tools.

These are based on uses of money and things you need throughout all of life.

Income: You need this forever. It could be active from your job or passive from investments. Some things are really helpful for this - like a job. Sometimes where your money is kept is not as good for this job.

Capital: This is the money you have access to. Some call it the emergency fund or opportunity fund. Some tools are great at this. Some tools you can't use until you are age 60.

Growth: Every dollar has to be growing or it is losing. Remember that cash is a horrible store of value since inflation makes it lose value every year. For it to be considered growth you are looking for growth above and beyond the "risk-free" rate of return.*

Health: This is the money that you set aside to take care of current and future medical expenses. This is the number one bankruptcy maker and only gets more expensive as you age. Most people are not thinking about this one - especially for their future self.

You need money that does each of these jobs well.

If you don't, it may be costly to you and future you.

You do not want to come to a financial job and realize the financial tool you have is not great at that job.

If you come to the point where it is time to paint the wall and all you have is a hammer...

That's going to be one ugly wall!

*Risk-Free Rate of Return: If you're getting 5% in your HYSA, that's your risk-free rate of return. So in order to get 8% you look at how much risk you are taking on to get an extra 3%.

Ray Dalio video on the "Holy Grail" of risk correlation.

What's Up With Money?! Film Club:

Dumb Money