Finance
Personal finance basics. Not get-rich schemes, not investment tips. The fundamentals that most people wish someone had explained clearly when they were twenty.
The principles
A short list. Most advice is a variation on these.
- 01
Spend less than you earn. There is no other rule.
Everything else is detail. If you cannot do this one thing, no investment strategy, no budgeting app, no side hustle will save you.
- 02
Build an emergency fund before investing.
Three to six months of essential expenses in a current account. Not stocks, not a pension. Cash you can access immediately. This is not optional.
- 03
Understand compound interest. It works for and against you.
Money in a pension or index fund grows exponentially over decades. So does credit card debt. The same force, opposite directions.
- 04
Pay off high-interest debt first.
Paying off a debt with a 20% interest rate is a guaranteed 20% return. Nothing else you can do with money is as certain.
- 05
Start your pension as early as possible.
Most European countries offer tax relief on pension contributions -- the government is effectively topping up every euro you put in. Check what applies in your country and use it. The earlier you start, the more compound growth does the work.
- 06
Don't try to time the market.
Nobody does this consistently. Invest regularly, in low-cost index funds, and leave it alone. Time in the market beats timing the market.
- 07
Keep your costs low.
Fund fees, account charges, broker commissions. A 1% annual fee sounds trivial. Over 30 years on a meaningful sum, it is not. Read the small print.
- 08
Automate what you can.
Set up direct debits for savings and pension contributions on payday. Money you never see in your current account is money you do not spend.
- 09
Your income is not your net worth.
A high salary spent entirely is worse than a moderate salary saved and invested. What you keep matters more than what you earn.
- 10
Financial stress is a health problem.
It is one of the leading causes of relationship breakdown, poor sleep, and anxiety. Taking it seriously is not about being materialistic. It is about being able to think clearly.
Sources and further reading
These principles are a distillation, not invention. The books and resources below go into the detail.
Morgan Housel, The Psychology of Money, 2020.
The best modern book on how people actually think about money, not how they should.
JL Collins, The Simple Path to Wealth, 2016.
Index funds, low costs, long time horizon. Straightforward and correct.
Vicki Robin & Joe Dominguez, Your Money or Your Life, 1992.
The book that reframes money as life energy. Changes how you see spending.
George S. Clason, The Richest Man in Babylon, 1926.
Old, short, and surprisingly timeless. Pay yourself first.
Bankers Without Borders / Your National Revenue Authority, Official tax authority website for your country.
Pension tax relief, capital gains exemptions, savings incentives. Every European country has them. Find yours.
Longer pieces on budgeting, pensions, and investing are coming.
This site provides general information only, not financial advice. Nothing here should be taken as a recommendation to buy, sell, or hold any financial product. Always do your own research and consult a qualified financial adviser before making significant financial decisions.