My Wealth Manifesto

Here it is, Buck’s manifesto to becoming wealthy*.  Follow these do’s and don’ts and you will be bucking-the-trend better than the majority of Americans when it comes to being financially savvy.

They are black and white for a reason – they can be followed by anyone and are not dependent on income level.  I’ve purposely omitted calling out a specific savings rate – this is largely a personal choice and is often variable and difficult to stick to given life’s peaks and valleys.

If I could go back in time to meet the 22-year-old me, I would bring a print-out of this list.  I think it would have served as confirmation of a lot of what I had in my mind at that time (saving and investing early does result in exponential growth) and also would have steered me out of some bad decisions.

Disclaimer:  Any information shared on does not constitute financial advice.  This Website is for informational purposes only and does not attempt to give you advice that relates to your specific circumstances.  Besides, the last thing you should be doing is taking financial advice from an anonymous guy on the Internet named Buck.Keys to Wealth

Without further ado:

1.  Always spend less than you earn – the golden rule of personal finance.

2.  Invest early, invest often.

3.  Invest in the following order, where able (for each working adult in the household):

  • Contribute to company sponsored 401k up to the point of earning the full employer match
  • Emergency cash fund large enough to cover 6 months living expenses in a single-income household (3-4 months in a dual-income household – bumped up as one of my astute commenters pointed out, enough to cover a standard 12-week FMLA absence)
  • Max-out Roth IRA to legal limit
  • Invest remaining savings by maxing-out 401K to legal limit
  • Invest remainder in taxable accounts

4.  Be generous to charitable causes that are important to you.

5.  Track your net worth monthly because what gets tracked gets managed.

6.  Invest aggressively in equities in your 20’s and 30’s.

7.  Buy and hold for the long term.

8. Define a target asset allocation mix and re-balance toward it yearly.

9.  Do not invest in individual stocks – invest in low-expense mutual funds that support your targeted asset allocation mix.

10.  Do not try to time the market.

11.  Do not invest in your employee stock purchase plan unless you can buy at a discount equal to or greater than 15% and there are few limitations as to when you can sell.

12.  Invest in real estate only if you are handy, have the time, and are able to deal with people and their shortcomings.

13.  Never pay full price for ‘want’ (non-commodity) items.

14.  Avoid consumer debt like the plague.  I define consumer debt as borrowing money to purchase anything that depreciates in value.

15.  Pay cash for all vehicles.

16.  Use cash-back or reward-based credit cards and ensure you pay off the full amount every month before the due date.

17.  Attend public schools, take them seriously and get the best grades possible.

18.  Go to a public university and pay in-state tuition.

19.  Make at least a 20% down payment when buying a house and spend less than 2.5 times gross income on the purchase price.  This is a general guideline and assumes no other debt.

20.  Marry someone with similar financial habits as you – or at least someone who acknowledges they are not great with money and a willingness to learn and adopt better habits.  Oh, and never divorce.

21.  Never turn down an offer for beers with friends, regardless of the cost.


* Let’s face it, you are already “wealthy” by almost any worldly definition so let’s keep this in perspective.  Just by reading this post we know you are:

  • In a sheltered, warm place with connectivity to the Internet.
  • Clothed (although maybe I shouldn’t assume too much).
  • Literate and proficient in one of the most influential languages in the world.
  • Probably not too concerned about from where your next meal is going to come.

28 thoughts on “My Wealth Manifesto”

  1. Wow, this is a great list. I dislike tattoos, but if I ever get one, perhaps I’ll get this on my forearm so I can read it a couple times per day. 🙂

    Your last 4 bullet points are great too. It is easy to take for granted of how lucky we are. Just be being born in the U.S., we both have a tremendous advantage.

    1. Haha. Yeah, a tattoo of this would be great. (At the parlor) “I’ve got this manifesto…do you think you could ‘art’ it up a bit?”

      Thanks for stopping by, Mr. 1500.

    2. Agreed on the last four points… really glad to see you added that in there Buck!

      It kind of ironic how people with the mindset of “I’m already so lucky to have what I have, so I don’t really need expensive gadgets, clothes, etc” are quite naturally the ones who end up even more wealthy (in monetary terms) whereas the people who have an entitled attitude and want to “get rich” often end up trying to buy happiness and end up struggling just to get by.

      1. Agreed, TFS. I do think personality types play into what you speak of a bit. There seems to be those who are able to delay gratification and those that struggle to do so. This is something that comes very easy for me so I have a hard time understanding and empathizing with those who are on the other end of the spectrum (and often make terrible financial decisions) but know the emotions they deal with are real.

        I appreciate you taking the time to comment. Have a great 2014.

  2. Hey Buck, just found your site – great stuff here! ! We are now in the “get it” crowd after many, many years of financial screw-ups and are working our way out of debt and into financial independence. Thanks for sharing your info – it’s a huge help for us!

    1. Hi Laurie. Looks like you are another Midwestern neighbor – you can never have too many of those around. Your family has an interesting story and sounds like you are tackling your finances head on and with a lot of gusto. Good for you. I’m intrigued about your DE experiment and will now be tracking along. Thanks for browsing.

  3. This is a brilliant list — one of the most succinct summations of a personal finance philosophy I’ve ever seen! I just came across your site through the 10 Questions list on 1500 Days and I’m glad I did…

    Our worldviews are extremely similar, but I wanted to ask you a question about point #3 above: Once you have a 3-4 month emergency cash fund, you recommend maxing out both a 401k and a Roth-IRA for each earner each year before putting any additional funds into regular taxable accounts?

    So the first $40,000+ of savings each year for a married couple goes into accounts that essentially can’t be touched until you’re 59.5?

    I’ve struggled with these ordering rules since I’ve been active in the PF online community; most people recommend doing exactly as you describe, but to me having a large amount of taxable funds allows you flexibility to both retire early and invest in things like real estate and others where easy access to regular savings are important.

    I guess I just don’t want all my money tied up in accounts that I can’t access for 25 years. I’d love to hear your thoughts though, as I suspect strongly that I’m missing something…

    1. Hi Brad. Thanks for stopping by and your kind words. You definitely are not missing something and are probably way ahead of the curve. You hit the nail on the head with your observation and is probably one thing I would do differently. As early retiree wannabe’s, my wife and I have invested way too much in deferred tax advantaged retirement accounts. We have gone from a place of maxing those out to pulling back all together so we have enough in regular taxable accounts that will float us until we hit 60. There is definitely a better balance in there somewhere. I’d love to hear more about your approach.

      I created this list to mainly speak to the masses. In those terms, I think any and all saving is beneficial and I think leveraging retirement accounts is a good way to do it. For those of us who are savers (and won’t blow the money) and are looking for investment opportunities, I completely agree with you. It does need to be tweaked for truly early retirees so that you have more money at your disposal to do some of things you suggest at an earlier age.

      1. Buck — thanks for the quick and thoughful reply. We definitely think very similarly and I can’t wait to explore your site more thoroughly…

        I completely agree that your list is perfect for ‘the masses’, but for those of us who can’t imagine waiting until 60 to retire, you’d probably need a slightly modified strategy. I think there’s clearly a dominant place in this strategy for those 401k/IRA vehicles, as they are really effective and have lots of benefits. We stockpiled money in these accounts for quite some time, but since I became woried that we were over-saving in retirement accounts, we’ve now pulled back to putting 9% of my salary in plus the 5% match from my company. I’m contemplating pulling back further still to 5% of my salary just enough to get the entire match.

        After that, we’re going the 100% taxable savings route. A little to prepayment of our mortgage (just a few hundred a month; I have an article about this on my site) but mostly just to index funds and some to Lending Club.

        I just learned a neat little trick that might help solve some of our early-retirement worries: Let’s say you leave your job and then roll your 401k into a regular IRA. You can convert this money to a Roth-IRA (and pay taxes on it of course) in whatever yearly increments you want and this counts as “contributions” to your Roth-IRA. This means you just have to wait 5 years from the date of each contribution and 100% of the contribution portion can be withdrawn tax and penalty free, regardless of your age!! I read about this and confirmed with Fidelity, but I’d like a 3rd source before I’m 100% sure about this, but I’m 99% sure for now…

        Done properly in a ladder-type fashion, you can massage this so you aren’t getting into the large marginal tax brackets each year with the conversions and can move enough over to cover your yearly expenses.

        We’re starting to do this with our traditional IRAs, especially if we still have room in the 15% marginal tax bracket (I have another interesting article on my site walking through the tax calculation for a family with $100k income).

        What are your strategies?

        1. Well our strategy now is to save as much in taxable as possible over the next few years knowing that our post-60 retirement fund is in good shape to ‘let ride’. We’ve gone pretty much cold-turkey in terms of retirement accounts (no more Roth, SEP for Mrs. Buck, or other IRA contributions). I’m still contributing the minimum to my company’s 401k but only enough to get the free money that they match.

          I look forward to browsing your site to learn more about some of these things you’ve noted. I haven’t heard much about that Roth trick but may be something we consider.

  4. I LOVE the last four bullets. How easy it is to get complacent when it comes to the comforts we take for granted.

    For most of the financial tips list, I was right along with you. I had a similar reaction to Brad’s when it came to the tax-deferred accounts:

    My husband and I have also pulled back from investing in tax-deferred accounts. We only invest based on taxation arbitrage (invest enough to get out of the highest marginal tax rate, but no more) and save the rest in after tax accounts. Otherwise, we’ll be tax-deferred-account rich and accessible-income poor! It’s a really great problem to have, so I’m not crying over it obviously. It’s just something to think about as one’s success with saving increases over time.

    1. Since this post and subsequent discussions with a few others, I’ve determined that saving “too much” in tax-deferred account may not be such a bad thing after all since there are ways to get it out before traditional retirement age (59.5+). For a glimpse into my follow-up thinking and considerations, see this link.

      Thanks for stopping by, FTP and your engagement.

  5. My only disagreement would be regarding individual stocks. We moved out of mutual funds and into individual stocks and bonds before the financial meltdown several years back and we are very glad we did. We only invest in stocks that pay a dividend so even though on paper our net worth went down some (although not much due to investment in bonds as well) our stocks kept right on paying out that dividend. So our investment income didn’t decrease by even a penny. If we had been in mutual funds, not only the value would have gone down, but also as the funds sold off equities so people could cash out, as many did, the dividend income decreased as well. Of course, you have to have the emotional capability to ignore the daily swings in value as well as an interest in researching stocks that fit into your investing profile, i.e. conservative buy and hold strategy vs. active trading. Otherwise, great list, and you are right, you don’t have to be wealthy to get wealthy.

    1. Hi Kathy – Thanks for weighing in. I do agree with you to a degree. I envy folks with portfolios of nothing more than a couple dozen dividend paying stocks that are able to fund their lifestyle. Fortunately I’m pretty in tune with my strengths; unfortunately picking stocks is not one of them. I also haven’t gone that route due to a couple of the arguments against it that J.L. Collins is able to more clearly articulate here.

      I do invest about 20% of our portfolio in bonds to ease the ride a bit.

      I appreciate you taking the time to comment. Have a good weekend.

  6. Loved the list Buck,especially your last four (be thankful) points. .Found you through Rockstarfinance.
    Would disagree with the emergency fund of only 1-2 months emergency fund for a couple. My wife and I lived it when facing chemo for one of our kids. Emergency fund should atleast be large enough to equal time off work for FMLA. Especially if following your guidelines and all of one’s money is tied up in retirement accounts,with none left over to invest in taxable accounts.

    1. You know what? Good point. We’ve usually had much more on hand as part of our emergency fund, so I’m not sure why I put it so low to begin with. Your point of having a stash equal to a full 12-week FMLA leave makes a lot of sense and I’ve updated the post to reflect that. All my best to your child.

  7. An important missed account: your spouse’s IRA.

    If your spouse does not work or does not get a 401(k) at work, you are allowed to contribute to his/her IRA. That Is long as you don’t make too much money (I believe the phase out is around $188,000) . This is called the Kay Bailey Hutchison Spousal IRA rule.

    I prefer a Traditional IRA for the spouse for our particular situation: working towards early retirement.

  8. I really liked this list.

    If I had the chance to go back in time to my 22 year old self, in addition to a print-out of this list, I would also probably have to bring a big stick for a little extra help with convincing…I know myself, I can be quite difficult.

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