August 31, 2023 · Revised November 2023

The Small Guide to Self-

Directed Investing 📈
by Christopher Cole

Disclaimer
This guide is general guidance provided for educational purposes only and should not be
construed as tax or nancial advice. Investing of any kind involves risk, including the
possible loss of the money you invest. Providing personalized nancial planning or investing
advice takes time, it is essential that you conduct your own research by assessing your
unique goals and circumstances, and draw conclusions for yourself using critical thinking.
Seek independent and professional advice that acts in a duciary capacity and is fee-
based, with strong evidence of competence, ethics, and trust, and no con ict of interest.

Acknowledgements
I wish to express my most sincere gratitude to Robert Berger, Paul Merriman, Larry
Swedroe, Benjamin Felix, Cameron Passmore, Chris Pedersen, Daryl Bahls, Tom Cock, and
Don McDonald, who greatly inspired me to write this guide. Their dedication for education
and benevolence have taught me everything I know about personal investing, adding a lot
of value, including some small cap, to my life.

Foreword

“
If you practice being better at managing your money, you practice being better at
managing your life.”
— Paula Pant

Four months ago, I had strictly no knowledge about personal investing. One could say that I
was part of the ⅔ of the global population considered nancially illiterate. It was by
coincidence that I stumbled on a video by Rob Berger entitled "What If Schwab Went
Bankrupt?" which caught my attention. It so happened that this particular video sparked an
unexpected interest for investing, which would undeniably change the course of my life.

My dad, 70 and retired, was never much of a do-it-yourself investor. Quite the opposite, he
had for most of his life hired an expensive advisor at a well-known Wall Street rm to
manage his savings, having full faith in their supposed expertise and morals. It turned out
without surprise that he had been invested in 37 di erent securities, most of which were
individual stocks and actively managed funds. I was disheartened to see that my father's
incredulity had been taken advantage of by the wolves of Wall Street, which ultimately led
me to write a short guide on the basics of investing, hoping it would give him enough
knowledge and con dence to take control over his investments.

I now wish to pass this guide on to you. It provides all the information you need to better
understand the key concepts of evidence-based investing, and will walk you through
several simple yet powerful steps that will set you on the right track towards a healthier
nancial future. Feel free to share this guide with anyone who you believe could also bene t
from the information.

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Index

1. Preamble ......................................................................................................................... 4

2. Philosophy ...................................................................................................................... 4

A. Why Bother Investing ........................................................................................... 4

B. Follow the Math .................................................................................................... 5

C. Ignore the Noise ................................................................................................... 5

D. Learn the Basics .................................................................................................. 5

E. Asset Classes ....................................................................................................... 6

✻ Part A ......................................................................................................... 6

✻ Part B ......................................................................................................... 6

✻ Part C ......................................................................................................... 6

F. Rebalancing ......................................................................................................... 8

G. Withdrawing ......................................................................................................... 8

✻ Part A ....................................................................................................... 9

✻ Part B ....................................................................................................... 9

✻ Part C ....................................................................................................... 10

✻ Part D ....................................................................................................... 10

H. Changes ............................................................................................................. 11

I. Hold Tight ........................................................................................................... 11

J. Keep Calm .......................................................................................................... 12

K. Debt .................................................................................................................... 12

L. Saving ................................................................................................................ 12

3. Current Investments .................................................................................................... 13

A. Risk .................................................................................................................... 13

B. Fees .................................................................................................................... 13

4. Suggested Portfolio ..................................................................................................... 14

5. Next Steps .................................................................................................................... 15

1. Stay with what you have .................................................................................... 15

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 2. Build a globally diversi ed portfolio ................................................................... 16

3. What about risk? ................................................................................................ 16

6. Other Decisions ............................................................................................................ 17

A. About your investments ..................................................................................... 17

B. About your cash ................................................................................................. 17

✻ Part A ....................................................................................................... 17

✻ Part B ....................................................................................................... 17

7. Which Broker to Choose ............................................................................................. 18

8. Getting Help .................................................................................................................. 19

A. Financial Advisors .............................................................................................. 19

B. Doing Your Taxes ............................................................................................... 19

C. Rob Berger ......................................................................................................... 20

9. Security ......................................................................................................................... 20

A. Passwords .......................................................................................................... 20

B. Two-Factor Authentication ................................................................................. 20

C. Virtual Private Networks ..................................................................................... 21

D. Encryption .......................................................................................................... 21

E. Security Questions ............................................................................................. 22

F. Be Fraud Smart .................................................................................................. 22

G. Thinking Ahead .................................................................................................. 22

10. Take Away ..................................................................................................................... 23

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 1. Preamble

“
Investing in your own nancial literacy may be one of the best investments that you can
make.”
— Ben Felix

The world of investing can seem intimidating and risky, at least this is what the nancial
industry wants you to believe. With so many people believing that only those "in the
industry" know the things that they don't, this notion of exclusivity has always been
promoted by the industry itself, or it would otherwise not exist at the level of pro tability it
exists today. Investing is before all a business which gains o of people's mistakes, the
industry makes more money the less e cient you are, so it supports the idea of complexity
to exploit uninformed investors. Financial brokers and Wall Street shenanigans aim to pro t
o the fears and greed of "know-nothing" investors by convincing them to buy into
"opportunities of a lifetime", the latest fads and frenzies, think crypto, or have them in
expensive and complex investment strategies. You must be careful and protect yourself
against those people who sound so caring, so right, with a great sales pitch about how
"guaranteed it is you can't lose". These really are just salespersons earning a commission
o you when they direct your investments in a certain way. The investing part is actually the
easiest of all for an advisor, yet it is where they make most of their money by charging
expensive fees. The reason is that by getting a percentage on your money, they get paid
regardless of how well or poorly the market is doing. Wall Street is not going to go out of
their way to tell you how to care for your money, their focus is almost certainly not on giving
you any nancial advice that is in your best interest. Your future should be more important
than their sales targets, so nancial planning should not be a game of chance.

Forget all the bogus, becoming nancially literate may in itself be one of the best
investments you ever make. As the saying goes, if you want something done, do it yourself.
Learning the basics of evidence-based investing is all you need to know, and trust me, it
might sound daunting, but investing isn't all that complex. The terminology behind it can be
very intimidating, and yet the basics are very simple. The goal of this guide is to give you all
the information and tools you need to be able to make informed decisions that are in your
best interest, and your best interest only. In and of itself, this could lead to some really
amazing long-term results. I hope what you are about to read will convince you to take very
simple steps that could individually lead to more money for you to either spend later in life,
pass on to loved ones, or donate to charity. Remember, if you choose not to follow these
steps, you are making a choice that would likely be a setback to getting you were you
should be nancially, and the consequences either way are life-changing. Regardless of
what you decide, I'm sure this will motivate you to do the right thing. Let's dive in.

2. Philosophy

“
The beginning is the most important part of the work.”
— Plato

A. Why Bother Investing

A good starting point is asking ourselves why we need to invest in the rst place. Investing
is primarily done to facilitate consumption in the future. To put this in perspective, money
saved in cash, or a cash-equivalent, depreciates over time due to being exposed to the risk
of in ation, resulting in a loss of purchasing power. In other words, what you are able to buy
with the same amount of money today is greater than what you will be able to buy in the
future. A good example illustrating this is looking back at the 1950's where a piece of gum

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 was worth 5 cents, but is closer to $1 today. It's worth mentioning that in ation is nothing to
be afraid of, it has always existed and is an inherent byproduct of our economic systems.
Now that we know that cash is a poor hedge against in ation, we must turn ourselves to
ways that will allow us to grow our wealth at a rate outpacing in ation. It turns out that the
returns of the stock market have historically been very e ective at doing just that, by and
large surpassing the returns of cash and bonds. As most people during their working life do
not accumulate enough by the time they retire, the reason to invest in assets that will deliver
positive higher-than-in ation returns becomes a clear necessity.

B. Follow the Math

How you make decisions about investing should be based on the same way doctors make
their recommendations, by reading the scienti c literature and not Men's Health or Reader's
Digest. Follow this reasoning and make decisions that are supported by academic evidence
and based on hard facts, not feelings or people's opinions. I can't emphasize this
enough, any legitimate recommendation should come from empirical evidence, which
means you should always be skeptical about what you read, particularly online and on
social media. The Wall Street Journal, the New York Times, Money magazine, Bloomberg
Businessweek, Investor's Business Daily, all of those publications would tell you, if they
were honest, that they are not geared toward long-term investors, but toward speculators,
traders, and market timers. Trustworthy sources you can count on originate from the peer-
reviewed academic research, and nowhere else. Evidence-based investing should be the
building-blocks of any sound decision-making process, and is the best way you can avoid
the scams and lies that will come your way. Lastly, learn not to rely on your emotions. We
make lousy judgments about what the future might hold based on biased feelings, in any
given moment.

C. Ignore the Noise

“
We have long felt that the only value of stock forecasters is to make fortune-tellers look
good.”
— Warren Bu et

The successful "do-it-yourself" way of investing can be pretty boring and straightforward,
far from the levels of excitement craved by the sensational media, hence why you never
hear or read about it. You by and large must learn to tune out the noise surrounding the
market, this includes all extravagant forecasts from self-proclaimed nancial gurus and
other talking heads who don't know where the market is going but pretend that they do.
The truth is no one can predict the stock market, not even experts. Investing is a faith
based industry where predictions are based on speculation, and anyone preaching certainty
is just blowing smoke. Financial and economic forecasts are often wrong and causes
nothing but hurdles to our long-term investment journey, which is why having a sensible
lifelong investment strategy and sticking with it regardless of what the market is doing will
help us stay the course and prevent irrational emotions from corroding sound investment
decisions. Read and think more, ignore the pundits and the prognosticators, don't get
caught up in clickbait, and you will do better than the vast majority of investors.

D. Learn the Basics

“
Part of demystifying investing is taking mystery and fear out. It isn’t complicated but
there are things to know, and once you know it, it’s kind of easy. Anyone can do it!”

— Rob Berger

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 The truth is that investing isn't as hard as it seems. The way you should invest $1,000 is no
di erent to how you should invest $1 million. Investing comes down to 4 simple objectives:

1. Diversi cation: We want to invest in a broad array of stocks and bonds

2. Stocks: While we want bonds in our portfolio, stocks should represent the majority of
our investments as they are what makes us money in the long term
3. Low Cost: We want to minimize the costs of our investments and optimize our tax
e ciency because they impact our savings
4. Simplicity: We want to keep our portfolio as simple as possible

Although you can accomplish all four objectives in many di erent ways, there is peer-
reviewed academic research and robust empirical evidence suggesting that there is a right
way for most people to invest, which is in low-cost index funds. If your goal is a reliable
long-term outcome, then there is no better approach but to invest in low-cost index mutual
funds and exchangeable traded funds (ETFs), you will in almost every case win in the long
run. Don't let the jargon intimidate you, index mutual funds and ETFs simply involve a
basket of thousands of stocks and bonds that are part of well-known indexes, like the
S&P 500, and aim to track the returns of the market as a whole. Index funds are considered
by many to give investors the best chance for long-term nancial success.

E. Asset Classes

✻ Part A

When it comes down to asset classes, know what you are aiming for before shooting:

• Cash is best for short-term requirements, usually anything within 5 years

• Bonds are most useful for planning outgoings in 5–10 years. That's because you can
know the returns you will get in advance, so long as you hold them until they are
redeemed "at maturity". Bonds are also used to reduce the volatility of your portfolio
• Stocks are best for long-term investing since they deliver the highest returns over longer
periods. Adding new money regularly, holding for many years, and reinvesting the income
can also help manage the volatility

✻ Part B

Some investors choose to invest in individual stocks. This is not advisable as attempting to
pick winning stocks is largely a losing game. The reason is that companies looking like
great long-term investments today can run out of business 10 years from now. Just think of
Enron, BlackBerry, Eastern Air Lines, and Lehman Brothers, which all used to be major
players on the stock exchange. The point is that any stock can go to zero, and the longer
you hold an individual company, the higher the probability of loss is. In addition, accurately
predicting a company's long-term success is impossible to do without speculating, and not
something you can do consistently. This is why we invest in a globally diversi ed portfolio
of index funds with thousands of companies, that way we reduce our risk if any one of
those rms were to disappear, taking their share price with them. If in spite of this you still
have a hankering for picking stocks, this should never exceed 1 to 2% of your portfolio's
net worth, but be warned that you are by and large speculating more than you are investing.

✻ Part C

“
The single most important decision we have to make in retirement is how much we
allocate to our stocks and bonds.”
— Rob Berger

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 As part of any good investment plan comes an asset allocation. Asset allocation is the
exercise of determining how much of each asset class you should hold in your portfolio.
The goal is simply to have appropriate amounts of stocks, bonds, and cash to have enough
money to live on in retirement, which will result in di erent portfolios for di erent people.
Having the right asset allocation is one of the most important determinants of expected
investment outcomes: a more aggressive portfolio with a higher expected return might
allow you to achieve a goal more quickly, or with less additional savings, but it may also
make the outcome more uncertain, and be harder to stick with when markets are volatile.
On the other hand, picking an allocation that is too conservative can have an enormous
implied cost due to lower expected returns. Simply put, a portfolio becomes less risky and
has a lower expected return as the allocation to bonds increases. Having the right amount
of stocks in a portfolio should be su cient to hopefully meet your nancial goals without
introducing the potential for catastrophic failure due to large declines at the wrong time.

As a general rule, a sensible equity portion to have during retirement is between 50% and
75%. Knowing that stocks outperform bonds in the long run, but are also riskier, you want
to make sure the equity portion of your portfolio does not exceed your ability to stomach
the volatility. Nevertheless, tending towards the higher allocation of 75% stocks if you can
a ord it may be a sensible decision. You can however choose any range that you feel
comfortable with, and while there are plenty of sensible options, the extremes tend to be
the least favored ones.

Risk/Return Equity Allocation of Portfolio

Very Low 0–20%

Low 20–40%

Medium 40–60%

High 60–80%

Very High 80–100%

Most retirees have a 60/40 portfolio, that is 60% stocks and 40% bonds, while others
choose to gradually decrease their risk by reducing stock exposure as they age. There is no
optimal answer for what asset allocation is best for you, it truly depends on each person's
unique nancial objectives, risk tolerance, time horizon, and current and future demands on
capital. The decision about how much risk to take (how much stocks to own) should be
driven by your ability, willingness, and need to take risk. The key takeaway is to make
sure that you are invested in an asset allocation that you can stick with no matter what.

The following table indicates several reasonable asset allocations to choose from:

Risk Allocation U.S. Stocks – Int'l Stocks – Bonds

Aggressive 70/30 35 – 35 – 30

Moderate 60/40 30 – 30 – 40

Conservative 50/50 25 – 25 – 50

Base your asset allocation on how much xed income you need to cover your expenses
and how well you could handle a bad market. Follow these steps to gure out an allocation
framework that's right for you:

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 (1) Stress test whatever spending rate you are currently on
(2) Look at your anticipated portfolio withdrawals and make sure they are reasonable
(3) Compare (1) with (2) and use that to drive your future spending

Vanguard o ers an online quiz that walks you through a series of questions to help gage
your appetite for risk and draws an allocation based on your answers. Vanguard does have
a tendency to recommend over-conservative portfolios, so I wouldn't take it as gospel, but
you should use it as a guideline and then come up with an allocation that feels right for you.

F. Rebalancing

Choosing a stocks-to-bonds allocation is one thing, but keeping it in place is another. As

the market is open and subject to uctuations, the value of each security in our portfolio
earns a di erent return, resulting in a change in weighting of our assets. Gradually, our
asset allocation will deviate out of our set tolerance, eventually by a lot. The idea behind
rebalancing is to periodically sell portions of our "winners", the assets that have gone up in
value, and use the proceeds to buy more of the assets that have gone down in value,
setting the weights of each asset class back to its original "target" allocation. The point of
rebalancing is to smooth out the zigging and zagging between our di erent asset classes,
helping us stay within our acceptable risk tolerance.

💡 Rebalancing keeps the expected risk level of our portfolio at or close to the target value,
but it does not necessarily improve returns

There are di erent approaches to rebalancing, the rst and most common is to rebalance
based on time, typically once at the end of every calendar year, which is perfectly
reasonable to do. Other possibilities include to rebalance on a monthly or quarterly basis,
the latter matching when dividends are payed out. These can have downsides as studies
have shown that rebalancing too ofter can hurt our returns, or there may be times when our
asset classes simply haven't moved by much. On the other end, Jack Bogle, the founder of
Vanguard, was of the view that you shouldn't rebalance at all and let your portfolio drift to
wherever the market takes it. Although this is certainly one approach, it likely isn't the most
reasonable as your portfolio would drift to the assets that have the higher expected returns
(stocks), making it riskier over time.

The third approach is called opportunistic rebalancing and is deemed the best way to go
about rebalancing, particularly for those with signi cant investments in taxable accounts.
The concept is not based on time, but rather focuses on rebalancing only if one asset
class deviates by a set percentage. In other words, you only rebalance if one asset class
goes above or below say a 10% threshold of its original allocation. The opportunistic
approach can be a great way of thinking about rebalancing from a tax perspective and has
shown to have slightly better returns than the previous methods mentioned.

⚠ In a taxable account, every sale of an appreciated asset may trigger a taxable gain

I understand that rebalancing can be a di cult topic to wrap your head around, I hope
some of this will be helpful as you think through how you want to rebalance. You could take
the Jack Bogle approach and decide never to bother with it, but this could potentially mean
deviating from your risk tolerance, or choose the simple approach and rebalance once
every year. Either way, this isn't something I would lose too much sleep over.

G. Withdrawing

Reaching retirement is a big change for anyone. You are now living o your nest-egg of
investments and the income you used to received through your paycheck is now in the form
of a state pension, which will likely not adjust with in ation. Fortunately for you, your

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 investments in addition to your pension are a pretty safe bet you won't be living in the
streets anytime soon. That being said, there is one very important rule every investor should
know about which is called the 4% variable distribution rule and is based on an analysis of
historical U.S. market conditions and in ation data.

✻ Part A

“
If you are a do-it-yourself investor investing in low-cost index funds and relying on the
4% rule, you’re in pretty good shape.”
— Rob Berger

Essentially, the 4% rule is a constant in ation adjusted spending strategy giving retirees a
framing on how much money they can pull out of their investments each year with the
con dence that they will have a steady income stream lasting 30 years. In other words,
the most you can spend from year-to-year in retirement, adjusting for in ation, with the goal
of not running out of money. It follows the principle that nancial independence is reached
when you have enough money so that 4% of your savings will cover your annual expenses,
or if we reverse the math, you would need 25 times your annual expenses.

The rule states the following:

(1) In your rst year of retirement, add up the total worth of your savings
(2) Multiply that by 4% which gives your safe spending amount for the year
(3) Divide that by 12 to have your monthly allowance
(4) The following year, adjust (2) by the rate of in ation to know your new spending limit
(5) Repeat step (4) every subsequent year, sort of like working in lockstep

🔎 To know the current rate of in ation (which varies each year), head to the U.S. Bureau of
Labor Statistics, under Customer Price Index, or CPI. This only applies for the U.S., but
a quick Google search will tell you the o cial CPI for France

CPI is one of the best drivers of any increases or decreases from your withdrawals from
year to year. That being said, you could instead consider following the R-CPI-E, which is an
adjustment of the CPI based speci cally on the spending patterns of the elderly (Americans
over 62 years old), but not without its own limitations.

Although nothing can be certain in that we don't know and never can know what the
exact safe withdrawal rate will be when we retire, it's worth telling ourselves that the 4%
rule has consistently survived very di cult times since 1926, including the worst 30-year
period in U.S. history, and should be taken into serious consideration by anyone getting
near or entering retirement.

Note that in its study, the 4% rule has been criticized by the academics for having omitted
certain important variables. In addition, many believe that 4% is now too aggressive in
today's world, and that a more reasonable guideline should instead be closer to 2.5%,
at highest 3.5%. Remember that the lower you can a ord to get by on, the safer position
you will be, especially considering our current economic landscape of high in ation.

✻ Part B

The 4% rule is a powerful way of gaining an insight on your spending as it can alert you of
potential problems such as if you are spending too much, or maybe too little. It's also a
great tool for implementing a budget. However, the rule does not account for investment
fees, which are a key consideration in determining a safe withdrawal rate; all else equal,
lower fees mean a higher withdrawal amount.

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 ⚠ Paying someone 1% in management fees will reduce your rst year withdrawal amount
by 10% for the rule to work

To put this in perspective, let's apply that to real money. If a portfolio is worth $1 million, 4%
of that is $40,000, which is what you can spend in your rst year. But paying someone 1%
in fees would lower that amount to $35,000. You now understand why fees matter so much
and how they can impact your money.

✻ Part C

Although the 4% rule is certainly a sensible strategy to implement in retirement, it's not
necessarily "the" best approach either. One great bene t is that the amounts you withdraw
remain fairly consistent and you don't have to make big adjustments to how much you are
spending each year. Nevertheless, it is important to mention that there are signi cant
shortcomings to the rule where con dence starts to decline when we consider certain
factors:

‣ The rst is that the 4% rule is based on the assumption that your retirement will last no
more than 30 years, and falls apart over longer retirement periods.

‣ The second is that the study behind the rule took into consideration data from the U.S.
only, completely omitting international data, which is unlikely to be representative of the
returns of a globally diversi ed portfolio.

‣ The third is that most retirees don't spend the same amount of money on an after-in ation
basis year in and year out. Studies have shown that as we age, say into our 80s and 90s,
we tend to become more conservative with our money and spend less, yet the cost of
long-term care can increase signi cantly later in life.

‣ The nal is that it completely ignores what is currently going on in the market. This means
having to potentially cut back on your spending during a bad-market year, or when
in ation skyrockets for an extended period of time.

There is a website called calc.app that lets you evaluate your withdrawal strategy. It stress
tests your nancial situation and gives you a percentage of how likely you are to meet your
withdrawal requirements during your retirement based on how much you take out each
year. This is a great way of nding out what safe withdrawal rate is right for you.

The key takeaway is that being exible and willing to adjust your spending habits based
on market conditions and in ation level will give you the best chance of living through your
entire retirement with su cient money. Remember, the more money you keep in your
portfolio, the better you can live through the bad market years that may happen in the
future, and the greater the likelihood is you won't run out of money.

✻ Part D

Arguably, the best way to determine your safe withdrawal amount is to ask yourself how
much money you would need in a year just to get buy covering your most basic standard
of living. Think cutting back on as much as you can, no discretional purchases or hefty
vacation, without going o the deep-end either. What amount of your portfolio would you
need just to cover your essential lifestyle? As a general rule of thumb, you want that
number to be between 2–3%. If it turns out you can't cover your expenses without going
over, it likely means you need to continue growing your savings before you can actually live
o of them in retirement.

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 I'll also mention that your safe withdrawal strategy should not be something that you set to
stone and never change as you move through retirement. On the contrary, you should
evaluate these numbers on a yearly basis to check whether they are still in-line with your
expenses and lifestyle, and make any necessary adjustments accordingly.

H. Changes

“
One of the hardest things to investing is sticking to your approach because it’s always
going to be the case that some other approach is making more money.”

— Rob Berger

Once you have established your investment strategy, make sure you stick with it
regardless of how good or bad the market is doing. The reason is that the market
delivers the return over the long term, and you lose money shifting from one perfectly
reasonable asset allocation to another perfectly reasonable asset allocation. Staying the
course no matter what will help you whether di cult periods with con dence.

💡 Ask yourself what portfolio would I be comfortable owning if I couldn't make any
changes to it for the next 25 years

Keep in mind that the long-term buy & hold investor only has to make very few changes to
his investments and can go years without doing anything. You should not feel the need to
make changes in the short-term, and a market fall should not be something to be afraid of
or alarmed by. Remember, you should:

• always follow your plan regardless of market variations

• never change your plan based on market conditions

Additionally, you are free to monitor stock market variations on a daily basis, but the truth is
that the long-term buy & hold investor has always outrun the active investor. Inevitably, if
the active investor sells, the passive “know-nothings” and long-horizon investors win.

“
If you like spending 6 to 8 hours per week working on investments, do it. If you don’t,
then dollar-cost average into index funds.”
— Warren Bu ett

What reasons are there to disagree? Ask yourself what do you think you know about
investing that Warren Bu ett doesn't — the answer is probably nothing.

I. Hold Tight

“
As far as you are concerned, the stock market does not exist. Ignore it.”
— Warren Bu et

Remember one very important thing, a time will come when the market will crash. These
times usually involve a lot more than just a falling stock market. We may be at war,
unemployment and in ation may be sky high, or the banking system may be on the verge of
collapse. Whatever happens, do not sell! There is always a narrative associated with a
falling market, and the narrative is ofter scarier than the drop itself. Think of all the hard
times the world has gone through over the past two centuries: world wars, political
con icts, revolutions, terrorist attacks, depressions, recessions, and pandemics. Dark skies
lie ahead, but it's always darkest before the dawn. The economy moves in cycles and the
stock market has always bounced back, rewarding those investors who didn't panic
during bad events and stuck to their strategy. Having an investment plan that can sustain

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 any of those types of turbulent environments and having the discipline to stick with are both
essential for investment success. Additionally, having an emergency fund and not investing
in the stock market any money that we will need within the next 5 years are additional
elements that will help us get through the hardships. The reason for the latter being that
stocks tend to be volatile in the short term, which can result in signi cant losses.

J. Keep Calm

“
People don't behave necessarily rationally in a really bad market.”
— Harold Evensky

In the moment when things are uncertain, it can be challenging to make good long-term
decisions. The worst thing an investor can do is panic and sell when the market declines.
Losing hope and bailing out at the wrong time, as a consequence of fear taking over the
rational decision-making process, is called committing portfolio suicide. By locking in your
losses, you make them permanent, cancelling out your chances of recovery. In simple
terms, you are doomed to fail if you panic. A 50% devaluation in stocks over the short-term
should not cause any long-term investor distress. And even if stocks continue to drop, this
is why you made a plan and invested in a risk-appropriate portfolio, and now is the
most important time to stick to it. Look at the past, bear market have happened regularly
over the last century and are bound to happen again in the future. Expect on average one
in every 3½ years! Save enough liquidity to be able to pull through the hard times, but
under no circumstances should you ever think of cashing out during a bad market.
Remember that hanging on through periods of uncertainty has produced reliably positive
long-term outcomes. If you can implement a methodical decision-making process as
opposed to an emotional one, you will likely be better equipped to make better decisions
and feel less anxious during challenging times.

K. Debt

“
If you’re really smart, you’re going to make a lot of money without borrowing. There’s
no interest in it.”
— Warren Bu ett

Borrowed money can signi cantly reduce how much you get to spend each year from your
investments, and having little to no debt is one of the best ways to withstand ugly
markets as you will be in a much better position to ride the ups and downs over the weeks,
months, and years that follow. Arguably, you can survive pretty much anything if you live
debt-free.

💡 Getting your debt under control is one of the best things you can do to survive bad
markets

Getting out of debt is not something that will happen overnight, but it should be a plan of
yours. Your portfolio already has a great potential to generate income.

L. Saving

“
Saving even relatively small amounts of money over time will add up to huge results and
turn into piles of cash.”
— Rob Berger

It goes without saying that saving money for the future is important at any stage, and this
includes during retirement. Remember than even a 10-year retirement makes someone a
long-term investor. A small 1% increase in your savings' rate can signi cantly grow your

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 portfolio's value over time, and by the same occasion reduce the time needed to reach
nancial independence. Getting rid of unused subscription services, shopping around
for better prices on car insurance, and chasing o debt, are all good examples of where
to start. In addition, putting money aside without it hurting your lifestyle adds an extra layer
of protection against ever running out of cash.

3. Current Investments

A. Risk

A good rule of thumb is to never take more risk than you are comfortable with. Always
think about your personal risk tolerance and remember that a stock market crash can hit
you hard, especially if it strikes in retirement. Being in a nearly-all-equity portfolio means
your volatility is very high, think of how you would react if your investments lost 30% in
value over the next bear market! Another concern is having your investments in individual
stocks, concentrating your volatility to those unique sources of risk. Just imagine how
hard the fall would be if one or several of these companies go bankrupt.

Of equal importance, a portfolio that is nearly entirely isolated to the United States, without
any meaningful exposure to international markets, is a gamble. Despite being well
respected for its safe regulatory environment and high historical returns, the U.S. stock
market, just like any other risk asset, can have very long periods of underperformance.
As a matter of fact, there is an estimated 3% probability that the U.S. market could do
worse than totally risk-free treasury bonds over 20-year periods. This has already happened
3 times in the past, so why take the risk? The bottom line is that it makes absolutely no
sense in today's world to concentrate all your investments to just one country. Remember,
only a foolish investor puts all their eggs in one basket.

B. Fees

“
If returns are going to be 7 or 8% and you are paying 1% for fees, that makes an
enormous di erence in how much money you’re going to have in retirement.”

— Warren Bu ett

People often times don’t look at their fees as signi cantly as they should, which is a big
mistake. Fees matter, every basis point counts as they erode your wealth over time, so it's
indispensable to minimize the fees associated with both your advisor and the funds
you are in. Having looked at your accounts, you are currently paying over 1% of your
money per year just in expenses alone; money that is paying for someone else's car,
vacation, or kid's education, and that could instead count toward your personal savings. As
with everything in investing, you have to run the numbers. Although 1% can look small, it is
higher than the industry standard, and even seemingly small fees can have a signi cant
e ect on reducing the value of your portfolio and what you have to spend each year.

Buyer beware! Some investment products charge what is called an "expense ratio" which
comes in addition to management fees. Additionally, certain actively managed mutual funds
have front-end loads, meaning your advisor gets money o you every time you buy shares
of that security. This is the reason behind your advisor calling you every year, they wouldn't
be able to make as much money if you otherwise didn't make changes. Firstly, there is no
reason to pay load fees, it has nothing to do with how the fund is managed or how it
performs. Secondly, being a successful investor is all about sticking with your strategy from
beginning to end and not jumping ships. If you are invested the right way, you shouldn't
have to make changes to your portfolio at all.

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 You now understand how bad investments can cost you in the long run. This is not to say
that all of your positions are necessarily bad or cannot work out well for you, but it certainly
means that you are not maximizing the diversi cation and returns you could otherwise
be getting without taking any more risk. Not only does your advisor have an incentive for
selling you high-fee products to get an immediate commission, which is a huge con ict of
interest, but you are getting less diversi cation and paying higher fees than you would with
low-cost index funds, which do not pay commissions. Remember that lower expenses lead
to higher returns, and the bigger the commission the worst the investment. You should
systematically choose commission-free funds with reasonable expense ratios, and always
know what you are paying others by translating percentages into a dollar amount. The
sooner you get out of those investments, the better o you are.

Moreover, the relationship between you and your advisor should be systematically
established without any con ict of interest, obligation, or high-pressure sales pitch.
There are people charging by the hourly who will look at your portfolio and give you an
honest second opinion without trying to sell you something or make recommendations
other than in your best interest. Any good advisor worth their salt would point out to the
fact that having over 75% in equities during retirement is severely risky, and that paying
anyone 1% in fees is unjusti ed in today's world. For comparison, Vanguard charges 0.30%
while making a pro t — if that doesn't tell you something about how sly some actors in the
nancial industry can be. More on nancial advisors in Section 8.

I appreciate that you have tied an emotional connexion to your current broker and may feel
a sense of con dence investing with them, but understand that you are paying more with
them than you would over at a commission-free broker like Vanguard, Fidelity, or Schwab.
Most wealth management rms are also commission-brokerage rms, which means you
pay commissions to get into products and every time you make a transaction. They are
also con icted rms in the sense that they are both a registered advisory rm, they have a
legal requirement to act in their client's best interest, but also a member of FINRA, which
cancels that duciary responsibility and replaces it with the inferior "suitability standard". In
other words, as long as the advice is suitable for the client, it does not have to be in their
best interest. How they de ne "suitable" is of course at their discretion. This naturally
poses a problem, where the advisor can legally sell products that generate large
commissions for the advisor, at the expense of the client.

What is even more important to emphasize is that most of Wall Street only cares about
making the most pro t o their clients — think of the upper hand the nancial industry has
in trying to sell to ignorant people expensive investment products without their best
interests at heart. People can sell you a lot of bad things by making them sound really good
if they are in a position of authority. Just ask yourself if you would be willing to pay a lawyer
1% of your wealth annually and perpetually regardless of whether they made you win the
case. No nancial rm can control what the market does, no advisor can predict the future
(as much as you might be led to believe that they can), and no one but the market itself is
actually responsible for making you money. The bottom line is no one cares more about
your money than you do, period.

4. Suggested Portfolio

Below is a very simple and globally diversi ed low-cost portfolio which takes into
account your age, time horizon, and nancial goals. It consists of only 6 funds which are all
ETFs, the reason being that index ETFs are considered very good investment products,
they are generally less expensive than traditional mutual funds, with their cost having
continuously fallen over the years, to the point that investing is almost free in terms of

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management expense ratios. Furthermore, ETFs are inherently more tax-e cient as they
distribute fewer capital gains, often not at all. This is an advantage when trading in a
taxable account.

Ticker Name Category Holdings

AVUS Avantis US Equity U.S. Stocks 2,300+

AVUV Avantis US Small Cap Value U.S. Stocks 750+

AVDE Avantis International Equity Developed Markets 3,300+

AVDV Avantis International Small Cap Value Developed Markets 1,350+

AVEM Avantis Emerging Markets Equity Emerging Markets 3,450+

VTEB Vanguard Tax-Exempt Bond Index Fund Municipal Bonds 7,500+

By owning a portfolio of di erent asset classes, you bene t from diversi cation. When
one asset class has a bad year, another will likely have a good one. As a result, you dampen
the ups and downs of your portfolio value. With this portfolio, you are covering entire
sectors and regions in over 18,500 companies with exposure based on your risk tolerance.
Call that diversity!

➥ About dividends

The topic about dividends tends to get people very excited. Investors like dividends purely
for psychological reasons, to the point where dividend investing is almost more of a lifestyle
than an investment philosophy. I appreciate that for a lot of people, aiming for stocks with
high dividend yields seems like a sensible approach, but the truth is that reaching for
dividends is not a good strategy. Despite being an important component of total returns,
dividends are not "free money", nor should they be seen as an investment return. They
are just moving money from one pocket to the other. The distribution of dividends results in
a reduction in share value, and dividends alone are not an indicator of a good stock to
own. A much more accurate metric of predicting a company's success is looking at total
returns, and this regardless of whether the company pays any dividends. If it can help you
feel better, remember that most stock ETFs already pay some kind of dividend anyway.

💡 Dividends in and of themselves don't make us wealthier. They are not an indication
about the quality of an investment, nor a guarantee for better future returns

The best thing you can do if you hold dividends is reinvesting them back into the market.
Because you are in a taxable account, you want to make sure to never automatically have
your dividends reinvested back into the funds that payed them. You will pay taxes on your
dividends anyway, so you might as well direct them towards funds that need rebalancing.

5. Next Steps

Now that you have all this this mind, the big question is whether you actually want to make
changes to your investments. In any case, you must gure out an investment plan tailored
to your personal nancial goals.

Start by asking yourself the following:

1. Stick to what you have (you're up for a bumpy ride)

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 • Can I stomach heavy risk and serious losses in case of a bad market?
• Am I OK with paying high fees and having no control over how my money is invested?
• Do I accept having little diversi cation with barely any safe investments like bonds?

🔎 Bonds are considered a safe blanket lowering volatility, your shock absorbers against
market crashes and in ation if you will

Remember that people in retirement are advised to have a good exposure to bonds and to
never exceed 75% in stocks.

2. Build an globally diversi ed portfolio (recommended)

• Would I rather invest in index funds and increase my diversi cation?

• Am I willing to reduce my volatility by owning more bonds?

If you answered "yes" to both of these, you will have to sell most if not all of your current
investments.

⚠ Selling securities in a taxable account can be a taxable event due to capital gains

Figure out what your best strategy is based on your tax situation; would there be more
consequences if you sold all at once as opposed to over 2 or 3 years? You might want to
ask a tax professional about the best way to make that transition.

Below is a table summarizing the 2023 tax brackets that apply for long-term capital gains.
They come in addition to your ordinary income and depend on your ling status, you le as
"Head of household" (HOH). The rates change every year so make sure to have the most
up-to-date numbers by heading to this website.

Tax- ling status 0% tax rate 15% tax rate 20% tax rate or more

Single $0 to $44,625 $44,626 to $492,300 $492,301 or more

Head of household $0 to $59,750 $59,751 to $523,050 $523,051 or more

Figure out what your tax bracket is based on how much short- and long-term capital gains
you have accumulated, then decide whether to sell out all at once if you are within the 0%
tax bracket, or spread out across multiple years to reduce taxes.

💡 You certainly want to avoid any short-term capital gains, if at all possible

3. What about risk?

Investing is a risky business where your capital can go down, and while choosing to
diversify your portfolio will make it less volatile, what it cannot do is shield you completely
from any losses. No investment strategy can, not even one owning just bonds. You will at
times, just like you have in the past, face market drops of 20, 30, or even 50% in value, and
setting that expectation from the beginning will at least put you in the right frame of mind to
avoid making mistakes that can hurt your nancial future. Remember that losing money is
part of the process of growing your savings over time, and you win by staying invested
over the long term.

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 6. Other Decisions

A. About your investments

1) Am I happy with selling my current investments and reinvesting them?

• If yes, what is my investment plan?
• If not, what would I rather do?

2) Am I comfortable with my current stocks-to-bonds allocation?

• If not, what asset allocation suits me best?
• How will I make the transition?

B. About your cash

✻ Part A

Setting aside a cash-cushion from your investments is very important to weather a bad
market as it allows you to deplete your assets without any volatility. Make sure you save
anywhere from 6 months to a year's worth of living expenses in cash, this should give
you enough of a shock absorber to get through a really bad market. However, the
decreasing purchasing power of cash over time can be nancially damaging. This is why
you should be careful not keeping too much aside because the absence of market returns
will have a real drag on your portfolio and safe withdrawal rate. If having some extra cash at
hand is something that can help you sleep better, then why not, but try to keep your bu er
as small as you can tolerate.

💡 Aim at having 2% of your portfolio is cash during retirement, and never exceed 10%

Taking too much money out of your portfolio in cash, as safe as it may feel, can really weigh
down on the overall returns of your investments. Worse even, completely getting out of the
market will cause your savings to devalue over time, resulting in a signi cant cost of capital.
You will be a lot less well o nancially if you make that decision.

✻ Part B

Deciding where to hold cash is very important, which is why a good cash management
system is necessary. The fundamental banking setup includes the following:

1) a general checking account covering day-to-day expenses, this includes a debit or

credit card and check-writing ability

The bene t of a traditional "brick-and-mortar" bank is that you can physically go to a

branch and speak to someone in person when a problem arises or you have a speci c
request. Traditional banks typically have higher fees (including possibly hidden fees)
covering account management, cards, banking services, and administration. Digital banks
like Wise stand out as less expensive and more reactive banking alternatives. Depending
on your circumstances, it can be advised to hold accounts at both types of banks, however,
you always want to check the fees associated with your accounts, and shopping around for
better o ers is always a good idea.

2) a cash-reserve account where you hold your emergency fund and any short-term
excess savings. You want to earn as much interest as possible but also have quick
access to your money

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 Arguably, the best place to hold your excess cash is in a money market fund. This is a low-
risk type of mutual fund that pays higher interest rates than a traditional savings account,
although some banks o er high yields as well. Vanguard has a good choice of money
market funds, including some tax-exempt ones. A word of caution, withdrawing from a
money market fund to a checking account will take a certain time before you can actually
access your cash, usually within 2 to 3 days.

Another option is Wise's interest-earning account paying higher yields than what you get
through the cashback-only rewards of a standard account, while still being able to withdraw
instantly. The trade-o is that Wise charges an annual fee of 0.47% (excluding currency
exchange costs).

⚠ Yields are high right now but only for a limited time and will ultimately go down

You could settle for a simple cash-deposit account but you'd be giving up on yields.
Regardless of where you choose to hold your cash, always make sure the bank or rm
o ers FDIC insurance, or some similar safeguarding policy, so that your money is
protected in case it were to collapse or become insolvent. Note that any amount held
exceeding the maximum compensation threshold is unlikely to be covered.

7. Which Broker to Choose?

What generally makes a bigger di erence is what you are invested in rather than who you
are invested with. That being said, fees always matter and so does SIPC protection. A good
question to ask yourself is will you still be happy staying with that broker 10 years from
now, because once your capital gains start building up, getting out will likely mean having
to pay taxes. You should then ask yourself if you are comfortable paying the very high fees
that come with a traditional brokerage rm. Keep in mind that there are commission-free
brokers which have signi cantly lower fees while providing excellent services. Household
names include Vanguard, Fidelity, Schwab, and E*TRADE. In terms of which one is better, I
highly recommend Vanguard. They are a very well established rm that always acts in
accordance with ethical standards and in their investors' best interests. I found their
onboarding team very accessible and responsive, and had an account opened within hours.
Other major bene ts of investing with Vanguard include:

1) Having control over your holdings

2) Paying no commission fees
3) Having access to nancial advice at a reasonable cost

The user experience of their website is clean with every key feature an investor needs,
some of which include the ability to trade within clicks and transfer money directly to and
from your bank. They also have a dedicated customer support line if you prefer getting
things done over the phone by speaking to a real human.

Lastly, having all of your investments in one place can simplify the process of managing
your nances (rebalancing, withdrawing, etc.), but can also give you a better overview of
your gains comes time for tax ling. Despite this, some argue that spreading your monies
across multiple brokers adds more security in case the website is down or your account got
hacked. Although both arguments are reasonable, I would do what works best for you and
your comfort level.

⚠ Only ever hold your investments at a registered broker that is a member of SIPC

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 8. Getting Help

I appreciate that this may all sound very overwhelming. The goal of this guide isn't to turn
you into a nancial expert, but to provide you with su cient knowledge so you can make
future decisions about your investments con dently. All it takes for the do-it-yourself
investor is to put down in writing a sensible nancial plan, adopting the right portfolio, and
sticking with it thick and thin. Of course, the 4% rule and rebalancing add a bit more
complexity, but far from anything impossible to do on your own. Having said that, I get that
DIY isn't for everyone, and that you might want professional help. Many people value a
relationship with a nancial advisor for many reasons. Consulting with an expert can save a
lot of time by minimizing the need for large amounts of upfront research, and relieving some
of the stress related to the task of implementing a nancial plan, reducing the time spent in
inaction. Additionally, expert advice can reduce complexity and help overcome poor
decision-making due to narrow framing, con rmation bias, short-term emotions, and
overcon dence. Surely enough, Vanguard has a 5-question quiz to help you evaluate
whether working with a dedicated advisor is something right for you.

A. Financial Advisors

Rob Berger made a list of low-cost nancial advisors he recommends (none are a liates),
where he mentions Mark Zoril. You can reach out to Mark by email but beforehand please
make sure you read the Q&A section of his website to make sure the services he o ers can
suit your needs. His company PlanVision can help you work out an investment strategy,
put together a low-cost portfolio of index funds, and even give you tax planning guidance,
all for an annual subscription fee of $239, which goes down to $96 per year after that.
Another advantage of Mark is that he works with expats on issues relating to living
oversees. You can set up an appointment with him, usually by videoconferencing, and he
will run through your nances and answer your questions. That being said, he will only go
so far as recommending you his best approach, but the tasks of staying the course,
managing withdrawals, and rebalancing will ultimately be your responsibility. More about
Mark Zoril here.

Vanguard also has advisors who can help you manage your investments, and would come
as a nice addition to Mark, even if you don't intent to stick with them in the long run. Note
that Vanguard advisors are duciaries who don't earn on commission, meaning they are
required to act in your best interest, and can help you create a custom nancial plan,
manage your accounts, and minimizing taxes. Although Mark seems great for expat-related
questions and tax advice, Vanguard might be better for things like retirement goals,
rebalancing, withdrawals, etc. Their service costs 0.30% on assets and gives you unlimited
access to real advisors.

I would call Vanguard on +1 (610) 669-1000 and explain to them your situation, that you are
currently invested in expensive actively managed funds and would like to move into a very
simple portfolio of low-cost index fund, and see what they say! There is no commitment
involved. You can ask them any questions, whether about transferring to Vanguard, or
about the bene ts of joining their advisory program. Nevertheless, please don't neglect
doing your own due diligence rst. Only you can decide for yourself which advisor, if any,
is best for you.

B. Doing Your Taxes

Another important consideration is whether to change tax accountants, or get rid of any
altogether. There are low-cost companies that guide you through the U.S. tax ling process
in exchange for a at fee. They o er a wide range of services, including doing your taxes
for you, and I would suspect even their most premium subscription would cost less than

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what Basil charges. Below are several popular names, I'm sure you can nd articles on the
web giving comparisons and ratings.

1. TurboTax
2. H&R Block
3. TaxSlayer
4. TaxAct

C. Rob Berger

I know I mention Rob a lot, that's because his YouTube channel provides a wealth of
knowledge on topics ranging from personal investing to managing you nances in
retirement. He is very active and releases new videos weekly, I encourage you to keep an
eye out and see if any can be of interest. You will nd answers to most questions about
investing, and his explanations couldn't be more comprehensive. A lot of what I learned
comes from him! Other great educational channels on investing include Ben Felix and Paul
Merriman — you can't go wrong with either.

9. Security

This section isn't directly related to investing, but touches on several very important topics
that are worth mentioning. The goal is to make you aware of ways to safeguard your
accounts so they are less vulnerable to fraud, scams, and hacking, keeping in mind
that nothing can completely eliminate that risk. Although you might think that you have
never been hacked and therefore shouldn't worry about any of this, but trust me, it's better
to be safe than sorry, especially considering how easy some of the recommendations below
are to implement, and how big of a di erence they make. After all, why run the risk, no
matter how small, of losing your money just because you clicked on that one malicious link,
or gave your password away to someone on the phone who you thought was your advisor.
In 2022, 58% of consumers globally were victims of online fraud, knew someone who was
a victim, or both. You must also realize that you can entrust your money with the safest
institution in the world, but they won't protect you any better if your account password is
"12345". This leads me to my rst point about passwords being your rst line of defense.

A. Passwords

We all know how much of a pain passwords can be, that's why we tend to go with short
and easily memorable ones, but the truth is that these are the worst types of passwords
you can have because of how easily guessable they are. As a rule of thumb, you always
want to choose a password that is minimum 16 characters in length, that uses both
upper and lower cases, has at least 1 number and 1 symbol ($#!&*_?). You also never want
to reuse the same password across multiple accounts. A really good technique is to use
passphrases instead of traditional passwords, for example:

Dancing5-Admiral-Elephant%

Another great way is to use a password manager. The idea behind it is that you only have
to remember one strong master password, and the software automatically creates
incredibly complex passwords for all of your accounts which you don't have to remember,
hence why the term "manager". There are many companies that provide free password
managers, like Bitwarden, while others charge a small fee.

B. Two-Factor Authentication

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Something you want to make sure to enable is two-factor authentication (2FA), especially
for your email, banking and nancial accounts, it adds a layer of security. You might have
heard of 2FA, it's that thing that asks you for a one-time security code every time you try to
log in, usually by text message. This means even if hackers knew the password to one of
your accounts, they would also need to have access to your phone to get in. I can't
emphasize enough how you want to have 2FA enabled on all of your accounts that o er it.

That being said, getting security codes by SMS isn't the best or safest option as SMSs are
vulnerable to hacking (SIM-swap, phishing) and can be very inconvenient in case your
number changes, you lose your phone, or when there's no network coverage, in addition to
potentially triggering carrier fees. A much better option is to have an authenticator app
that generates time-based security codes that renew every 30 seconds directly from your
phone, and can even be used o ine. A great authenticator app I recommend is called
Authy which lets you sync your security codes across all your devices, and backs them up
so you can recover them in case you lose your phone or get it stolen. Note that 2FA through
an authenticator apps is not as frequently available as SMS.

C. Virtual Private Network

Every time you go on a website it tracks what is called your IP address; a sequence of
letters and numbers that uniquely identi es a device. The website then uses that IP to gure
out your location in the world. What a virtual private network, or VNP, does is it masks your
real IP address and replaces it with one from a di erent country of your choosing. For
example, I could be logging into my Vanguard account in France, but if I use a VPN and tell
it I want my IP to be in the U.S., what Vanguard will actually see is a browsing connexion
originating from the States. In addition to that, using a VPN also encrypts all the data that
goes from my device to a website's server. This is why so many people warn against
logging into personal accounts over public Wi-Fi, as without encryption, hackers can see
whatever information leaves your computer, including passwords. Most VPN services
charge a small monthly fee, although there is one that is both free and trustworthy called
Proton VPN. They are highly focused on security and also o er a password manager (paid).

D. Encryption

Encrypting your data touches on my previous point as it is a vital part of keeping

information private. "End-to-end" encryption basically serves as the guarantee that a
conversation cannot be accessed or intercepted by anyone but you and its intended
recipient. Examples of unencrypted communications are phone calls, emails, SMSs (green
text bubbles), weak-security Wi-Fi, and websites using outdated protocols (like HTTP). Any
information being transmitted through these could potentially be seen by malicious actors,
posing serious privacy and security risks. This is why you are warned against giving any
personal data, like credit card or social security numbers, over the phone.

WhatsApp, for instance, has always maintained that all its messages are end-to-end
encrypted, but there is a loophole where messages reported as abusive can be viewed in
plain by the company. As you see, it can be very di cult to trust rms about encryption,
even those that advocate it. One messaging platform that o ers "zero-access" encryption
is Signal Private Messenger, this is ideally where you would want to share sensitive
information, if at all necessary, provided the other person has the app installed as well. It is
also recommended to set a disappearing message timer for even more peace-of-mind,
although it won't protect against screen-shots. In any event, it's important to keep your
communications as private as possible, especially when sharing con dential information.

In addition, always make sure to surf on the web using an encrypted connexion, usually a
green padlock icon will show up next to the search bar indicating the connexion between
you and the website is secure. Never sign into your accounts over public Wi-Fi, and

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 always be reluctant to give information over unencrypted waves, unless you are absolutely
certain the person on the other end can be entrusted with it for legitimate purposes.

E. Security Questions

Some banks and nancial services may ask you to set up security questions, typically the
name of your mother's maiden name, or your favorite hobby. You want to be careful with
those common questions as you'd be surprised how easily guessable they are. The name
of your birthplace isn't necessarily hard to nd, and may even be available on public
records. It's not that security questions are bad altogether, they do add an extra layer of
security, but you might want to think about what kind of answer you put down, either by
making sure no one, not even your close circle, could possibly gure them out, or simply by
making up incorrect answers.

F. Be Fraud Smart

Scammers are using increasingly sophisticated fraud techniques via email, text, or even
through fake websites to get personal information from you (e.g. name, email, phone
number, passwords, account details) and use them to gain unauthorized access to your
nances. Be vigilant of account takeover, also known as phishing attacks, these attempt to
steal your account credentials or infect your device with malware by tricking you into
clicking a link or downloading an attachment. If you receive an SMS or email saying that
"your account security has been compromised" and requiring you to provide personal
information or change your account password via a link, it's a scam! Sharing your personal
details via this link would lead to your account being stolen.

You should always be nervous before clicking a link. When reading an SMS, or opening
an email, it's crucial to never click any link or download anything you don't completely trust
or understand, especially if it comes from unknown senders. Scammers may also use
cloned websites with small changes to the URL to trick you into thinking that you are
buying from a genuine retailer. If you can't tell, get in touch with the business yourself to
check. The best way to contact a company is through the contact page on their o cial
website, or directly via their app on your phone.

Impersonation scams are when criminals pretend to represent organizations such as your
bank, nancial advisor, government authorities, or delivery services. This type of fraud can
be some of the most damaging, scammers will try to steal your money by convincing you to
move money into a fake account. They can use stolen personal information to trick you
into thinking they are legitimate, sometimes taking months to build trust with their victim.
They can con rm your name, date of birth, or address, and claim to be from a company's
fraud department, appearing to know about transactions on your account. Scammers can
even fake telephone numbers so that texts and calls appear genuine. If you are told "your
money is in danger", this should be a warning sign. Only scammers will try to rush or panic
you, telling you that your money is at risk and you need to act urgently by moving your
money to a "safe account". Genuine institutions will never ask you to do this, or ask for
personal information like passwords, personal details, or security codes. Never give in to
someone who appears insistent and urges you to do anything about your money. Always
take a moment to stop and ask yourself, could it be fake? It's absolutely ne to reject,
refuse, or ignore request.

The bottom line is to be wary of strange links asking for personal information, and of people
pressuring you about your accounts being "compromised". If you think that you have been
duped, fallen for a scam, or suspect that your account is showing fraudulent activity, freeze
your cards, change your passwords, and contact your bank immediately. You should also
report any incidents to the police. You can read more about the latest scams here.

G. Thinking Ahead

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You are highly encouraged to name one or several trusted contacts to your nancial
accounts. This will help protect your assets in case of suspicious activity, or if you
experience cognitive decline. Just like an emergency contact, that person should be able to
provide an informed and objective assessment about your wellbeing and health status, and
should not be authorized to transact on your account to prevent any con ict of interest.

Consider also completing a bene ciary designation if you intend to pass on your funds after
you die. This will generally determine who inherits the account, without being subject to
probate, and will override provisions of your will or trust regarding distribution of your
assets. If you choose not to designate a bene ciary, the assets will be added to your estate
and divided according to the laws in your state. You can name anyone as a bene ciary, this
includes individuals, trusts, charities, or organizations, but you are recommended to seek
advice from your nancial or estate planners rst to ensure coordination with your overall
estate plan. Note that Transfer on Death Plans may not necessarily be the best option from
a tax perspective. You should also review and update your bene ciary designations
whenever you experience a major life event, such as a birth, marriage, divorce, or death in
the family.

10. Take Away

Thank you for making it all the way to the end! I know I've thrown in a lot of information and
I hope at least some of it was helpful. Regardless of how you decide to handle your
investments, the key message is to understand that your current portfolio is unsuitable in
many ways. Most retirees look for a defensive strategy that will soften the blow in case of a
bad market or crash, but also provide them with su cient income to cover their expenses.
Whatever you choose to do, you must remember that although your portfolio does generate
income, it is expensive, poorly diversi ed, overly complex, and highly volatile. I really
hope that you won't continue to take the punishment any longer, and if all of this sounds
too overwhelming, start by taking small steps one at a time. Give it some thought and try to
come up with an investment plan that suits your nancial goals (how much money do I
need), time horizon (for how long), and risk tolerance (how much risk am I willing to take), so
you can make the best decisions about your money moving forward. If you want the
future to be brighter, don't wait to make changes, do the right things now.

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