Money Moves And Curious Questions For 2024

Hey look, it’s 2024 already. Where did 2023 go? Never mind.

This is supposed to be a money blog, but I find that I don’t write about money much anymore. However, I still think about it. All. The. Time.

I’lll talk about my money moves for the new year at the end of this post. Before I get to that, I have some questions for you to ponder.

Money Moves For 2024

While I rarely change up my investments, I think about money daily. You should not do the same! But everyone should review their money situation occasionally. Below are some money questions for you to ponder.

Note: I’m not a money advisor. I post photos of plastic dinosaurs. If you’re not sure, consult a pro!

1. Should I focus on pre or post-tax investments?

Consider the following situation:

Married earning $175,000/year.

After deductions, every dollar earned after $95,376 is going to be taxed at 24% (!). If you and your partner put $40,000 into a conventional (pre-tax) 401(k)s, you’ve saved yourselves $9,600 in taxes. You’ll have to pay taxes when you eventually take it out, but you’ll most likely be in a much lower tax bracket then. And if you aren’t, that’s a great problem.

If you don’t have substantial income (lower tax burden), consider erring on the side of post-tax investments like Roth IRAs or 401(k)s. You’ll pay taxes upfront on your investments, but then they’re tax free forever.

If I was just starting out in my career, I’d load up Roth investments. Then, I’d gradually pivot to pre-tax investments as my income grew.

2. Are you and your partner aligned?

Money is the biggest cause of marital strife. That’s what everyone says anyway. On the surface, that may be true. But how you save, invest, and spend money is really a reflection of values. Money issues are how misaligned values present themselves.

A couple doesn’t need to have the exact same values around money, but each person must acknowledge and respect the other’s choices. If your differences are small, one way to navigate this is to have separate finances.

If your differences are big, you could be in for trouble.

Check out a list of 16 fun questions that Mindy and I came up with to discuss with your partner. We’re also going to answer some of these questions ourselves on the March 6th episode of Mindy On Money.

3. Do I need to rebalance?

2023 was a great year for the markets. If you keep a percentage of money in instruments other than stocks like cash or bonds, make sure that your balances are where you want them to be.

If you invest in individual stocks, are you happy with your level of diversification? In my case, tech stocks have taken over my portfolio. I’m gradually selling them. More on that in a moment.

4. Is my money serving me?

Here’s a question to ask yourself:

Why am I saving?

Mindy and I saved for a long time, but had no idea why except it just felt like the right thing to do. Then we discovered financial independence. Boom! We had the answer all along (money), but now we knew what problem (financial independence) we were trying to solve.

But now we’re at another place in life where we have more money than we need. Therefore, our goal is to find ways to use the money effectively. As your money situation changes, so should you.

If you lost 80% of your wealth, you wouldn’t continue with the same spending. The same applies once you’ve gained wealth. We have used money to outsource pain points including hiring help for of our home projects. As your money changes, so should you. You don’t want to be broke, but you also don’t want to be one of those people who live a miserly existence and die with millions.

5. If early retirement is your goal, are you setting yourself up properly?

The Mad FIentist has shown us strategies that we can use to access pre-tax money early. Those strategies are fine, but they’re also complex and require planning.

Why not just put some money in a post-tax brokerage account? Long-term capital gains taxes start at $47,025 and $95,050 for single and married filed jointly respectively. That’s a lot of money to play with.

I like having multiple buckets to pull from in retirement. In retirement, whether I pull from my post-tax account, my Roth IRA, or 401(k) will depend on what my taxes and spending will look like.

In low spending years I’ll:

• Execute Roth conversions on my 401(k)
• Sell individual stocks for tax-gain harvesting

In big spending years, I’ll pull from Roth accounts to minimize taxes.

6. Are your investments consistent with your goals?

My goal is to have the most money, so I don’t pay off my mortgage early (yay leverage!). I also keep almost 100% of money in stocks, private loans, a rental house, and a couple real estate syndications. No bonds and very little cash (this may change soon, more below). Because of the stocks, I’ll have more volatility (looking at you Tesla), but long-term, more money.

Your goals may not be the same. Perhaps a growth heavy portfolio like mine would make you lose sleep. If so, a cash buffer or a portfolio that favors dividends is more your style.

What is your big goal? Is your money serving it well? If not, what do you need to change?

My Money Moves For 2024

Here are my money moves

1. Start Selling Individual Stocks

Note: I wrote about this in last week’s post.

The older I get, the less that I want to think about individual investments. I’m going to start selling off individual stocks

I will do it slowly. Long-term capital gains start at $94,050 for married folks filing jointly. Our post-tax holdings are $1,641,085 with $1,220,496 in gains. Since Mindy still works, I’ll spread out the tax hit by selling holdings slowly.

I’m not going to try to pick winners. I’m going to sell small bits of every holding. I have no clue which one of these stocks is going to do well over the long-term, so I’ll just lop off an equal amount on a percentage basis. Selling about 5%-10% off each year sounds good.

I’ll immediately reinvest the proceeds. I’ll divide the money between VTI/VTSAX and QQQ (or a similar tech heavy index fund).

If Mindy stops working, I’ll liquidate the positions faster.

2. More Cash

Older Daughter is a junior in high school. We don’t have 529 plans. Instead, we’ll use proceeds from our post-tax account to help pay college costs. In my ideal scenario, she’d be able to get loans that don’t accrue interest until graduation and then we’d help pay them off then.

I’m a big fan of keeping almost all of our money completely invested all of the time, but now that we may be needing to spend more, I’d rather have a bigger cash cushion. I’m not sure what this will look like, but maybe $50,000?

3. Less Spending

Last year, I went bonkers with spending including:

• Chevy Bolt
• Tesla Model Y
• A private concert

Other spending experiments included a Taylor Swift concert ticket and a trip to Hawaii. I regret nothing, but 2024 will be a lot tamer. This will be the year of road-trips including:

• Las Vegas and Arizona
• Petaluma California
• The Pacific Northwest
• The Midwest

I like road trips and have a bunch of free supercharging credits from Tesla, so the cost for these trips will be minimal. It will be good to see friends all over the country.

The one big expense is a cruise I bought for my family.

Slowing Down

More than anything, I look forward to slowing down. Our live-in flip is going on 5 years now, but almost done. No more after this! I look forward to more writing, playing music, and going for long walks.

Life is good.

More 1500 Days!!!

You can also find me (and the dinosaurs) podcasting at:

• Mile High FI
• MindyOnMoney

Also here:

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