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Financial Samurai

Slicing Through Money's Mysteries

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Should You Write A Book? Pros And Cons Of Being An Author

Updated: 01/29/2023 by Financial Samurai 43 Comments

So you want to write a book but aren’t sure if it’s worth your time. As a published author of both an ebook and a traditional hardcover book, let me share with you the pros and cons of being an author.

Given the success of my Wall Street Journal bestseller, Buy This, Not That, I’ve been given another book deal by Portfolio Penguin Random House. Therefore, this post will not only help you decide whether to write a book, but it will also help me decide whether to write another book too!

It’s funny, but the whole premise of Buy This, Not That is trying to decide between two difficult choices. With careful analysis, my goal is to help readers make optimal decisions to live their best lives and minimize regret.

So here goes another thought exercise for creatives willing to put themselves out there.



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Short-Term Thinking Destroys Long-Term Wealth: Do A Cost-Benefit Analysis

Updated: 01/18/2023 by Financial Samurai 21 Comments

Before making any big financial decision, always do a cost-benefit analysis. Focus on the costs more because most people are too mesmerized by the benefits. Great marketing and perennial optimism can lead to great disappointment.

In the post, The Second Biggest Financial Mistake You Can Ever Make, I made the argument to never expect your income to always go up. If you do, you run the risk of buying things you cannot comfortably afford.

The expectation of always getting paid more, despite a bear market, is odd to me. When I worked in finance, even if we performed well, we sometimes were paid down if the overall firm was doing poorly.

If you always feel entitled to more, this may be detrimental to your long-term wealth. With your back never against the wall, you won’t be motivated to find new ways to make money.

Let me share a passionate disagreement from a reader who is a lawyer. No matter the economic environment, he believes employees should always get paid more. It’s a great example about how two people can see capitalism differently.

I’ll then explain my decision to forgo $12,500 in MBA tuition reimbursement so long ago. I’m thankful for the reader’s feedback. Without it, this post would never have been written.



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How To Enjoy Your Life After The Fed Ruins The World

Published: 12/15/2022 by Financial Samurai 191 Comments

Enjoy your life, no matter the economic situation. If you do, then you’ll always be winning. The key is to recognize reality and take appropriate action.

The Fed hiked another 50 basis points to 4.25% – 4.5% on December 14, 2022. Despite two consecutive lower-than-expected monthly CPI numbers, the Fed indicated it will hike to a terminal rate of 5.125%. Most investors were hoping the Fed would stop at 5%.

Meanwhile, the 10-year bond yield is only at 3.45%, meaning there is a huge yield curve inversion. It’s the largest inversion in over 40 years. The bond market is screaming for the Fed to stop hiking, but it just won’t listen.

As a result, the United States will inevitably go into a recession again in 2023 thanks to the Fed’s overly aggressive tightening. Over a million people will lose their jobs, banks will go bust, and trillions of wealth will evaporate. Instead of expecting inflation in 2023, we should start worrying about deflation again.

All the good done by governments to support billions of people during the pandemic will have been for nothing. Can you imagine struggling through a pandemic for three years, finally coming up for air only to be run over by a speedboat driven by a rich central banker?

When you are worth ~$100 million, as Fed Chair Jerome Powell most certainly is, you may not care as much about the middle class as you do about your legacy. Instead, you want the history books to emphasize how you were tough on inflation and gloss over the human suffering caused by your decisions.

Federal rate hike speed versus other times in modern history. Fed is hiking further and faster than any other time.


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When The Elites Go On Strike, We Should Pay Attention

Updated: 01/05/2023 by Financial Samurai 55 Comments

If you’re like me, chances are you are not part of the elite. Like 75% of college students, you may have gone to public school. For various lengths of time, you may have been underemployed or unemployed. Further, you definitely didn’t come from a rich family with prominent connections.

Despite not being one of the elites, life can still be pretty good. Personally, I enjoy being a nobody so I can more easily do as I please. When nobody is watching your every move, life feels totally free!

However, when the elites do go on strike, we should probably pay attention. Because no matter how hard the gatekeepers try to keep us shut out from the pinnacles of success, it’s always good to understand various points of view. Maybe then we can one day climb to the top of society’s ladder as well. If we can’t, maybe our children can.

Let’s explore what The New York Times strike means for the rest of us. I’ll also discuss whether we should redefine what it means to be an elite and whether the term really matters. No matter how much we have, we seem to always want more.

But first, let me share some background on my experience with The New York Times.



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Thankful For Luck: A Phone Call That Changed My Life For Good

Published: 11/24/2022 by Financial Samurai 69 Comments

Despite the pandemic and a bear market making things difficult for so many, there is still so much to be thankful for.

We need to all be thankful for the luck we’ve had so far. Personally, I’m thankful for luck. The more we can recognize luck in our lives, the happier we will be.

I’ve been a super-optimist all my life and I plan to continue being one until the day I die…. a 100 years from now.

During this Thanksgiving holiday, I wanted to re-share one extremely lucky event that occurred in my life. Without this lucky event, my life today would be totally different.



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Being A Professor Is The Ideal Occupation For Riches And Status

Updated: 12/09/2022 by Financial Samurai 53 Comments

There are very few occupations that provide the ideal combination of riches and status. Being a professor is one of them.

Tenured professors are able to make six-figure incomes and earn valuable pensions. Getting a PhD or a post-doctorate is the pinnacle of academic achievement. Meanwhile, most people respect professors for their positive contributions to society.

After I retired from finance in 2012, I considered getting a PhD. Given I had enough passive income, I could afford to return to school for several years. With a PhD, I would then have the option of becoming a university professor.

Teaching is something I thoroughly enjoy doing, as hopefully evidenced by my writing on Financial Samurai. I’m always curious about new concepts and theories because the world is always changing.



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Suing Your Employer For Laying You Off Is Probably A Bad Move

Published: 11/09/2022 by Financial Samurai 12 Comments

Suing your employer as part of a mass layoff is probably not going to get you anywhere. Instead, you will likely end up wasting your time and money. In addition, you may also end up hurting your reputation and future employment prospects.

Even after 10+ years of being unemployed, hearing about mass layoffs is still jolting. It brings to the surface suppressed memories from the 2008-2009 global financial crisis. In 2009 alone, I counted seven rounds of layoffs at my firm.

I tried to hire one of my closest friends at the time who just had a baby. Lehman Brothers laid him off with roughly $25,000 in unpaid corporate card expense reimbursements. Unfortunately, he didn’t make a good impression on my Aussie colleague so he never got hired. Mostly due to his pride, our relationship deteriorated after.

Ultimately, I survived the layoffs. Then in 2012, I asked to be included in the next round of layoffs so I could receive a severance package. In retrospect, getting laid off was one of the best things that could have happened to my life. But at the time, the decision was suspect.



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The Golden Parachute Severance Package: Oh How Sweet It Is!

Updated: 11/09/2022 by Financial Samurai 9 Comments

As someone who wrote a book on how to negotiate a severance package, it always makes me happy to see public case studies. The latest case study is on the “golden parachutes” received by three ex-Twitter executives.

A golden parachute consists of substantial benefits given to top executives if the company is taken over by another firm, and the executives are terminated as a result of the merger or takeover. Common benefits may include stock options, cash bonuses, and generous severance pay.

If you receive a golden parachute, you’re more than happy to jump off a cliff or even out of a burning plane. You will land softly on your feet and feel like you won the biggest lottery ever!



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Where Are All The Adult Athletes? Sports And Your Career

Updated: 12/26/2022 by Financial Samurai 38 Comments

For over 20 years, I’ve been a tennis club member. Player levels range from beginner to ex-professionals. Everybody gets along and rallies around a sport they enjoy, no matter their level of wealth.

But I just realized something odd. And the realization wouldn’t have come had I not become a father. After three years of mingling with preschool and kindergarten parents, I’ve been wondering where the heck are all the adult athletes?

Maybe I’ve lived in a sports bubble for too long. Because the vast majority of my friends play sports. Tennis and softball are what we do for fun. It’s so much better than going to the bar and drinking all night!

I was also taught the importance of learning tennis or golf because they are lifetime sports commonly played in business settings. If I didn’t know how to play either, I might be left out from career and client events.



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Overcoming The Downer Of No Longer Making Maximum Money

Updated: 11/13/2022 by Financial Samurai 76 Comments

Do you know what is really hard? Deciding to walk away from a whole lot of money in your prime. If you decide to retire early or take a lower-paying job out of joy, you must accept the death of your maximum money potential.

Over the years, many readers looking to retire early or do something more fun but less lucrative have found it difficult to walk away. After all, working for just one more year will boost your savings that much more!

Then ten years go by and they regret sacrificing so much time for money. Time lost with friends and family. Journeys not taken. Businesses not built. Passions not followed. The list goes on.

If you don’t enjoy your job, this regret of pursuing more money will sting even worse. Therefore, make sure if you choose money, to make the most of your free time.

This post will share how you can quit the pursuit of always making more money to live a more fulfilling life. Because once you get to your target stretch income, the joy won’t last for more than a month. You’ll then naturally try and make even more money.

The cycle never ends until you learn how to break it.

Breaking The Golden Handcuffs Is Hard

At age 34, I was making a base salary of $250,000. Come year-end, my bonus would range between $0 to $500,000. Instead of suffering from the one more year syndrome for one more year, I decided to quit the money by negotiating a severance instead.

If I hadn’t left my job and averaged a realistic $500,000 a year in total compensation since 2012, I would have made $5 million by now. And if I had gotten regular raises and promotions, maybe I would have made more than $7 million after ten years.

Damn, perhaps I should have stayed in finance after all!

The more you make, the harder it is to walk away. Conversely, the less you make, the easier it is to take more chances.

I told myself back in 2011 that if I didn’t leave soon, I probably never would break free from the golden handcuffs. Many people who dislike working in finance, management consulting, and big tech after a while have this same problem. It’s hard to drop your maximum money potential.

However, if you’re unhappy with your current situation, as I was, you must find a solution to overcome the desire for more money. Once you make enough to have your basics covered, more money truly doesn’t bring more happiness unless you enjoy what you do.



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