Lessons

🐷 Money

Emergency fund, debt, savings rate. The part that comes before markets.

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Where your money goes

The gap between what comes in and what goes out is the only number a market can ever act on.

The gap is the whole gameMoney comes in. Money goes out. What is left over is your gap. That gap is the only money that can ever reach…
Your savings rateYour savings rate is your gap divided by your take-home pay. Save €300 out of €2,000 and your rate is 15%. It…
Fixed, variable, and the sneaky middleFixed costs arrive on the same day for the same amount: rent, insurance, a loan payment. Variable costs move…
Gross, net, and what actually landsGross pay is the headline: what your employer agreed to pay. Before it reaches you, income tax is withheld and…
Pay yourself firstThe default order is: get paid, spend the month, save whatever survives. It fails because spending expands to…

The cash buffer that has to exist before any market does, because it is what stops a bad month from becoming a forced sale.

Why this comes firstBoilers fail. Contracts end. Cars need a €1,500 repair on a Tuesday. None of that is bad luck, it is just life…
How big is enoughThe usual target is three to six months of essential spending. Essential means rent or mortgage, food…
Where it livesAn emergency fund has one job description: be there, in full, on the day you ask for it. That means instant or…
What counts as an emergencyA fund with no rules gets spent. So use three tests. Unexpected: you could not reasonably have seen it coming…
Refilling without guiltPeople build a buffer, then feel terrible the first time they use it. That reaction is backwards. A fund you…

Compounding runs in both directions, and on a credit card it runs at you.

Compounding, running the other wayCompounding is not on anyone's side. It takes a balance and a rate, and it grows the balance. When the balance…
Reading an APRAPR means annual percentage rate. On a loan it is meant to bundle the interest with the fees you cannot avoid…
The minimum payment trapYou put €2,000 on a card that charges 1.67% a month, the rate sitting behind a 20% headline. The minimum…
Avalanche versus snowballSay you owe €4,000 on a card at 24%, €600 on a store card at 19%, and €2,500 on a car loan at 11%. You pay…
Is any debt fine?People sort debt into good and bad, which stops the thinking too early. Three facts do the real work: the…

The one decision that decides where every spare euro goes, and it turns on a comparison most people never make.

The hurdle rateEvery spare euro has one job to choose from. It can pay down a debt, or it can be invested. Clearing a debt…
Guaranteed beats expectedA card charging 18% and a fund hoping for 8% both quote a percentage, but they are not the same kind of…
The employer match exceptionSome employers add money to your retirement account when you do. Put in 5% of salary, they add 5%. That is an…
The order of operationsThe pay-it-off or invest-it question gets much easier when you stop treating it as a single decision and start…
Mortgages and student loansA 22% card and a 3% mortgage share a word and almost nothing else. Long, low-rate debt is spread over decades…

Some money has a date attached, and a market cannot be told about the date.

Money with a date on itYou have €20,000 in one account. €8,000 is the deposit on a flat you sign for in eighteen months. €12,000 is…
The five-year lineA common convention says money you need within about five years does not belong in volatile assets. It is not…
Rent money is not risk capitalLook at your account on payday. Most of what sits there is not yours to risk. Rent or mortgage, food…
What you can afford to loseEveryone says invest only what you can afford to lose. Almost nobody runs the test. Here it is: if this went…
The house deposit problemThis is the most common version of the mistake. You have €40,000 saved for a house deposit, three or four…

The account you buy something inside can matter more than the thing you buy. Wrappers, tax treatment and the trade between shelter and access.

The wrapper is not the assetOpen any investing app and you make two separate decisions. First, which account you open. Second, what you…
Tax-advantaged accounts around the worldEvery country invents its own acronyms, but they cluster into three shapes. One: a workplace account, funded…
Taxed now or taxed laterSheltered accounts come in two flavours. In the first, you contribute money that has already been taxed, and…
The long lock-upRetirement wrappers hand you a tax advantage and take something in exchange: access. Most will not let you…
Handing off to marketsLook back at the sequence. You measured the gap between what comes in and what goes out. You built a buffer so…