Stacked

1. Timeline Your Goals to Prioritize and Visualize

The world is full of obvious things which nobody by any chance ever observes.

Visualizing financial goals. Most financial books start with writing out goals, but this book emphasizes timelining them. Draw a line representing your life, mark significant goals (retirement, college for kids, buying a home), and note the ages at which these milestones occur. This visual representation helps you understand how your goals intersect and compete for resources.

Goal equation. Every goal comes down to a simple equation: A (savings) × B (return) = C (goal). Calculate the savings needed, the return required, and the timeframe for each goal. This allows you to see if your goals are realistic and identify potential shortfalls.

Adjusting your plan. If you can't afford all your goals, you have several options: increase your income, invest more aggressively (with caution), reduce the scope of a goal, or push it back. Timelining makes it easier to weigh these options and make informed decisions.

2. Budgeting: Plan Ahead, Not Just Track Expenses

Couples who talk about their money get busy more often.

Budgeting vs. tracking. Tracking expenses is about looking backward to see where your money went, while budgeting is about looking forward and planning how to allocate your resources. Both are important, but budgeting is essential for achieving your financial goals.

Creating a budget. Base your budget on the goals you timelined. Determine how much you need to save each month to reach your goals. If you don't have enough money, identify areas where you can cut back or automate savings.

Budget meetings. If you're in a relationship, hold regular budget meetings with your partner to review your financial status, assign to-dos, and discuss upcoming expenses. This helps ensure everyone is on the same page and working toward the same goals.

3. Increase Income: Raises and Side Hustles

I find that the harder I work, the more luck I seem to have.

Primary job vs. side hustle. Increasing your income is crucial for reaching your financial goals. Focus on both your primary job (asking for a raise, switching jobs) and starting a side hustle to diversify your income streams.

Negotiating a raise. When asking for a raise, understand your boss's perspective and demonstrate how you can help solve their problems. Bring facts and data to support your request, and don't ambush your boss.

Starting a side hustle. A side business can be a lucrative way to earn extra money. Avoid common pitfalls like overspending on equipment or training, and focus on execution. Create a simple business plan and start small, learning and pivoting as you go.

4. Debt: A Dangerous Tool, Not a Way of Life

Though debt can cause serious damage, it’s important to remember that debt isn’t the enemy, like that boy Scott Church back in third grade.

Secured vs. unsecured debt. Secured debt is tied to collateral, while unsecured debt is not. Secured debt typically has lower interest rates, but both types can be dangerous if not managed properly.

Debt payoff strategies. There are two main strategies for paying off debt: the debt snowball (smallest balance first) and the debt avalanche (highest interest rate first). Choose the method that works best for you and stick to it consistently.

Avoiding the debt cycle. To avoid falling back into debt, identify the reasons why you got into debt in the first place and take steps to avoid those temptations. Embrace delayed gratification and find ways to make debt payoff fun.

5. Credit: Use It Wisely, or It Will Use You

I find that the harder I work, the more luck I seem to have.

Credit as a tool. Credit can be a useful tool for making large purchases, protecting your purchases, and increasing your ability to profit. However, it can also be a crutch that extends your lifestyle beyond your means.

Improving your credit score. To improve your credit score, pay your bills on time, keep your credit utilization low, and maintain a mix of credit accounts. Avoid applying for too much credit at once.

Fixing bad credit. If you have bad credit, take steps to fix it by paying down debt, disputing inaccuracies on your credit report, and seeking help from credit counselors if needed.

6. Investing: Harness the Power of Compounding

Don’t stay in bed unless you can make money in bed.

Saving vs. investing. Saving is about setting money aside for a future purchase, while investing is about growing your money over time. Investing offers the benefit of compound interest, which allows your money to earn interest on interest.

Types of investments. Common asset classes include stocks, bonds, mutual funds, exchange-traded funds (ETFs), and real estate. Each asset class has its own risk and return profile, so it's important to diversify your investments.

Investment concerns. Before investing, consider your risk tolerance, time horizon, and liquidity needs. These factors will help you determine the best type of investments for your goals.

7. Overcome Analysis Paralysis and Snap Judgments

I find that the harder I work, the more luck I seem to have.

Analysis paralysis. Overvaluing opportunity costs can lead to analysis paralysis, where you become overwhelmed by the number of choices and unable to make a decision. To overcome this, limit your research time and use the 3-then-5 rule.

Snap judgments. Undervaluing opportunity costs can lead to snap judgments, where you jump at free stuff without considering the long-term consequences. To avoid this, don't take free stuff you wouldn't buy and beware of the sunk cost fallacy.

Balance and awareness. The key to good decision-making is to find a balance between careful consideration and decisive action. Be aware of your tendencies and use strategies to overcome them.

8. Insurance: Manage Risk, Don't Just Buy Policies

I find that the harder I work, the more luck I seem to have.

Emergency fund. The first step in managing risk is to build an emergency fund to cover unexpected expenses. This will allow you to raise deductibles on your insurance policies and invest more aggressively.

Law of large numbers. Insurance is a way to pool your risk with other people, so you can take advantage of the law of large numbers. This ensures that money is available when you need it.

Evaluating insurance needs. Focus on the most expensive insurances first, as these represent the biggest threats to your well-being. Consider disability insurance, auto insurance, homeowner's insurance, and life insurance.

9. Estate Planning: Secure Your Legacy

I find that the harder I work, the more luck I seem to have.

Estate planning documents. Essential estate planning documents include a will, living will, power of attorney, and letter of intent. These documents outline your wishes for your assets and medical care in case you become incapacitated or die.

Choosing an executor. Your executor should be someone you trust to carry out your wishes and manage your assets responsibly. They should be organized, detail-oriented, and able to handle conflict.

Trusts. Trusts can provide control over your assets from beyond the grave, protect your heirs from overspending, avoid probate, and provide tax relief. Consult an estate attorney to determine if a trust is right for you.

10. Cultivate a Benjamin-Stacking Mindset

I find that the harder I work, the more luck I seem to have.

Money scripts. Your financial beliefs are shaped by your childhood experiences and can influence your money behaviors. Identify your money scripts and challenge any limiting beliefs.

From scarcity to abundance. Shift your thinking from scarcity to abundance by appreciating what you already have, focusing on what you can control, and remembering that even successful people face challenges.

Negotiation and value. Great negotiation is all about knowing who you are and a willingness to learn about the other person.

Last updated: March 2, 2025