How I Invest My Money

How I Invest My Money Plot Summary

Introduction

Money transcends its basic role as a medium of exchange to become a mirror reflecting our deepest values, personal histories, and aspirations. This collection of investment philosophies from financial professionals unveils a profound truth: there is no universal formula for financial success, but rather a diverse spectrum of approaches shaped by individual circumstances and worldviews. Through intimate revelations about their own portfolios and financial decisions, these experts challenge the notion that investment choices are purely mathematical calculations. Instead, they demonstrate how financial strategies are deeply personal expressions of one's relationship with risk, time, purpose, and meaning. The value of these candid disclosures lies not in providing a blueprint to follow, but in illuminating the rich tapestry of thought processes behind financial decision-making. By examining how experts balance technical knowledge with emotional intelligence, readers gain insight into a more holistic approach to wealth management. Whether discussing psychological biases, family legacies, or the pursuit of independence, these narratives reveal that authentic financial wisdom comes from aligning investments with one's core values rather than chasing returns at any cost.

Chapter 1: The Psychology of Money: How Personal History Shapes Investment Choices

Financial decisions are rarely made in a vacuum of pure rationality. Our earliest experiences with money create powerful imprints that influence our financial behaviors throughout life. These "money scripts," as Blair duQuesnay terms them, are deeply embedded beliefs about wealth that can either empower or limit our financial potential. For many contributors, childhood experiences of scarcity created a heightened appreciation for financial security and independence. Morgan Housel describes how witnessing his parents' financial journey instilled in him a desire for financial autonomy rather than mere wealth accumulation. The emotional dimension of investing proves just as significant as technical knowledge. Several experts acknowledge the gap between theoretical best practices and psychological comfort. Christine Benz admits she maintains higher cash reserves than might be mathematically optimal, but this choice provides peace of mind. Similarly, Bob Seawright and others emphasize that mathematical efficiency sometimes must yield to emotional well-being. This reality challenges purely rational economic models that fail to account for human psychology. Personal financial trauma can shape investment philosophies in profound ways. Leighann Miko recounts growing up in financially volatile circumstances, where utilities would be disconnected and evictions loomed. These experiences created complex emotions around money that influenced her approach to wealth management. For Tyrone Ross, growing up in a financially illiterate household meant making every financial mistake imaginable before developing a disciplined approach to investing. These narratives demonstrate how financial expertise is often forged through personal struggle rather than academic theory alone. Risk tolerance emerges as highly individualized and often tied to personal history. Some contributors maintain aggressive growth portfolios while others prioritize stability and preservation. What becomes clear is that risk tolerance is not merely a function of age or wealth but deeply connected to personal values and past experiences. Perth Tolle's concentrated position in her own freedom-weighted emerging markets fund reflects both her conviction in the investment strategy and her personal values regarding human liberty. The psychology of money also reveals itself in how investors define "enough." Joshua Rogers notes that determining when you have sufficient resources represents one of the most profound financial decisions. Morgan Housel articulates this clearly in describing how he and his wife deliberately established a lifestyle they enjoy and then anchored their spending at that level, allowing additional income to flow to savings. This concept of financial contentment—knowing when more money will not meaningfully improve life satisfaction—appears repeatedly throughout these personal accounts. These psychological dimensions of money help explain why cookie-cutter financial advice often fails. When financial decisions are understood as expressions of values and identity rather than mere mathematical optimizations, the importance of personalized approaches becomes evident. The most successful financial strategies align with an individual's unique psychology, creating sustainable behaviors that can weather market volatility and life's uncertainties.

Chapter 2: Principles vs. Portfolios: The Balance Between Rules and Personal Reality

Investment principles provide necessary structure for decision-making, but their application requires flexibility to accommodate personal circumstances. Many contributors describe adhering to fundamental investment tenets—diversification, low costs, long-term focus—while simultaneously making exceptions based on their unique situations. Dan Egan articulates this tension well, noting how his overall asset allocation looks "perfect" from the outside, but within each account, investments are tailored to reduce tax drag based on specific account characteristics. This exemplifies how principles serve as guides rather than rigid commandments. The tension between orthodoxy and pragmatism permeates these financial narratives. Ashby Daniels maintains a 100% equity allocation despite conventional wisdom suggesting older investors should hold bonds. His reasoning—that anything reducing short-term volatility must also reduce long-term returns—demonstrates how personal circumstances and goals can legitimately override standard advice. Similarly, Brian Portnoy acknowledges holding significantly more cash than financial theory might recommend, explaining that his career in hedge funds creates correlated risks that justify additional liquidity. Multiple contributors describe situations where they knowingly violate conventional wisdom yet remain confident in their choices. Joshua Brown maintains individual stock positions despite advocating index funds for clients, explaining, "I just love stocks and have ever since I was 20 years old. And it's my money, I get to do whatever I want with it." Morgan Housel owns his house outright despite low mortgage rates, acknowledging this decision is "indefensible on paper" but provides psychological benefits worth the financial cost. These examples highlight the legitimate role of personal preference in financial decision-making. The nuanced relationship between principles and portfolios extends to career decisions. Several contributors view their professional endeavors as their most significant investments. Shirl Penney notes that a substantial portion of his net worth remains in his business, Dynasty Financial Partners. Dasarte Yarnway similarly describes his firm as his largest asset, valuing not just potential financial returns but the control and impact it provides. This perspective transforms career development into an investment strategy, where human capital becomes the foundation for financial capital. Principles also face practical constraints. Jenny Harrington describes herself as a dividend income investor both personally and professionally, aligning her own portfolio with her clients'. This consistency between personal practice and professional advice appears frequently, though with occasional exceptions. Ted Seides explains how his institutional client portfolios differed from his personal investments due to specific constraints and requirements, illustrating how principles must adapt to contextual realities. These narratives collectively suggest that financial principles derive their value not from rigid application but from thoughtful adaptation to individual circumstances. The most sophisticated investors maintain awareness of conventional wisdom while developing personalized interpretations that acknowledge their unique constraints, opportunities, and psychological needs. This balance between principles and pragmatism enables sustainable financial strategies that individuals can maintain through market cycles and life transitions.

Chapter 3: Beyond Returns: Prioritizing Independence, Peace of Mind, and Meaning

Financial independence emerges as a predominant aspiration among these experts, transcending mere wealth accumulation. Morgan Housel eloquently captures this sentiment: "Independence, to me, doesn't mean you'll stop working. It means you only do the work you like with people you like at the times you want for as long as you want." This freedom from financial constraint represents the ultimate form of optionality—the ability to make life choices without monetary pressures. For many contributors, this goal supersedes maximizing investment returns, leading to seemingly suboptimal financial decisions that nonetheless support their vision of independence. Peace of mind frequently outweighs mathematical optimization in these financial narratives. Several contributors maintain larger cash reserves than traditional financial theory recommends, valuing the psychological comfort of liquidity over potential investment returns. Morgan Housel keeps approximately 20% of his assets in cash, noting, "cash is the oxygen of independence." This perspective reframes what might appear as inefficient asset allocation into a deliberate strategy for maintaining emotional equilibrium—a precondition for sound long-term decision making. Purpose-driven investing appears throughout these accounts, with financial choices reflecting deeply held values and priorities. Perth Tolle created a freedom-weighted emerging markets index that excludes countries with poor human rights records, aligning her investments with her beliefs about liberty. For Bob Seawright, purchasing a cottage in the Adirondacks represented a "lousy investment" financially but proved "the most important financial investment" for bringing his family together. These examples illustrate how financial decisions serve as expressions of personal values rather than mere wealth-building mechanisms. Several contributors explicitly challenge the notion that investment performance should be measured solely by financial returns. Dasarte Yarnway notes that his business investments provide three forms of return: ownership of his time, opportunities for servant leadership, and creation of legacy. Ryan Krueger describes his "GRINdex account"—investments in creating memories with his children's sports teams—as having immeasurable value beyond any financial metric. These perspectives expand the concept of investment returns to include non-monetary dimensions. Time consistently appears as the ultimate non-renewable resource, with financial decisions evaluated based on their impact on time allocation. Debbie Freeman describes balancing the need to save for her children's future with the desire to create experiences in the present, noting that "getting so fixated on the future that you forget to enjoy today" represents a common financial mistake. This time-conscious approach to wealth management transforms traditional financial planning into life planning, where money serves as a tool for optimizing time allocation rather than an end in itself. The pursuit of meaning also shapes specific investment choices. Joshua Rogers arranges his investments around "things you love to own and that you are obsessed with researching and gaining knowledge about." This approach turns investing into an extension of personal interests rather than a separate financial exercise. Similarly, Howard Lindzon describes his venture capital investments as aligned with his expertise in financial technology, creating intellectual engagement alongside potential financial returns. These examples demonstrate how aligning investments with personal interests can enhance both satisfaction and performance. These narratives collectively redefine financial success beyond portfolio returns to encompass independence, peace of mind, and meaningful life experiences. By prioritizing these broader outcomes, these experts exemplify a more holistic approach to wealth management that integrates financial expertise with personal values and psychological well-being.

Chapter 4: Human Capital: The Often Overlooked Investment in Ourselves

Human capital—our knowledge, skills, and capabilities—represents a fundamental yet frequently undervalued asset in personal finance. Lazetta Rainey Braxton articulates this principle clearly: "My first investment was in me... Human capital is when you bring value to an organization by utilizing your skills, knowledge, and experience to advance their financial success." This perspective reframes education and professional development as investment activities rather than consumption expenses. For many contributors, particularly those from modest backgrounds, investing in their capabilities provided the foundation for subsequent financial success. The returns on human capital investments often surpass those of traditional financial assets. Carolyn McClanahan reflects that her medical education yielded "immeasurable" returns despite the initial cost. Dan Egan describes how his hourly wage has grown nearly tenfold since he began working at age 16, attributing this growth to consistent reinvestment in himself through formal education, technical skill development, and communication training. These examples demonstrate how systematic development of marketable skills can generate exponential returns over a career. Professional expertise frequently constitutes the largest asset in these financial narratives. Howard Lindzon notes that his domain expertise in financial technology creates a "unique and abundant flow of deals" that provides investment opportunities unavailable to generalists. Similarly, Michael Underhill describes how his understanding of real assets shaped both his career and personal investment approach. This alignment between professional knowledge and personal investments creates intellectual consistency while potentially enhancing returns through specialized insights. The entrepreneurial dimension of human capital appears prominently in several accounts. For business owners like Alex Chalekian, Joshua Brown, and Shirl Penney, their companies represent their largest investments. Alex explains his strategic approach to practice acquisitions, noting that purchasing a financial advisory practice generating $100,000 in recurring revenue for $250,000 creates the equivalent of "a bond with a 40% coupon." This entrepreneurial perspective transforms business development into an investment strategy with potentially superior returns to traditional assets. Professional relationships and networks constitute another dimension of human capital. Ted Seides observes that "the value of relationships goes entirely unmentioned in the active-passive debate," noting how connections with active managers provide "access to people, ideas, and opportunities that can never occur while investing in an index fund." Howard Lindzon similarly attributes his investment success partly to network effects and relationship capital. These social dimensions of human capital highlight how professional relationships can create investment advantages beyond technical knowledge. The development of human capital also includes psychological capabilities that enhance financial decision-making. Morgan Housel notes that his ability to maintain equanimity during market volatility represents a significant advantage: "I never get bothered during the normal downturns that happen. In fact, I often have to feign that I understand that people get spooked and rattled during market volatility." This emotional resilience, whether innate or developed, enables long-term investment approaches that might prove psychologically impossible for others. These narratives collectively highlight human capital as perhaps the most consequential investment domain, providing both the foundation for financial accumulation and the wisdom for effective wealth management. By systematically developing their capabilities, these experts created personal economic engines that generate opportunities and insights unavailable through financial markets alone.

Chapter 5: Asset Allocation Diversity: From Real Assets to Digital Investments

The diversity of asset allocations among these financial experts challenges the notion of a single optimal portfolio. While conventional wisdom might suggest professional consensus around asset allocation, these personal narratives reveal remarkable variation in portfolio construction. Some contributors maintain almost exclusively equity portfolios while others incorporate substantial allocations to real estate, private businesses, digital assets, or collectibles. This diversity reflects not confusion but rather thoughtful adaptation to individual circumstances, expertise, and risk preferences. Traditional financial assets—stocks, bonds, and cash—appear in most portfolios but with significant variations in implementation. Christine Benz maintains both active and passive funds in her retirement accounts, noting specific rationales for each selection. Jenny Harrington focuses exclusively on dividend-paying stocks, explaining that dividends provide "the purest mechanism for shareholder return." Ted Seides describes his preference for active management based on valued relationships with managers. These nuanced approaches to public market investing demonstrate how personal perspectives inform seemingly technical decisions. Real assets feature prominently in several portfolios, particularly real estate. Bob Seawright describes purchasing a cottage in the Adirondacks as "a lousy investment" financially but "the most important financial investment" for his family's happiness. Alex Chalekian owns rental properties, while Nina O'Neal has prioritized private school tuition for her children as an "investment" with "huge, obvious benefits for their education and overall development." These examples illustrate how real assets often serve dual purposes as both investments and lifestyle enhancements. Alternative investments appear throughout these narratives, from venture capital to collectibles. Joshua Rogers maintains a diverse portfolio of "inefficient markets" including real estate, fine art, watches, collectible automobiles, and cryptocurrencies. Perth Tolle created her own emerging markets ETF focused on countries with greater personal and economic freedom. Howard Lindzon concentrates on early-stage financial technology companies where his expertise provides an edge. These specialized allocations reflect both personal interests and professional insights. Digital assets, particularly cryptocurrency, represent an emerging allocation category. Tyrone Ross notes that "the majority of my investments are tied up in cryptoassets," while Howard Lindzon includes Bitcoin among his core "8 to 80" holdings—companies whose products both 8-year-olds and 80-year-olds cannot live without. This integration of digital assets into traditionally conservative portfolios indicates growing mainstream acceptance of this relatively new asset class. Business ownership constitutes the largest asset allocation for many contributors. Shirl Penney acknowledges the concentration risk in having "a substantial portion of my net worth still riding alongside the other equity owners and partners at the firm," but notes that "the bet on the business, the strategy, industry, our people, and our clients has paid off nicely thus far." This willingness to maintain concentrated positions in their own businesses reflects both confidence in their enterprises and recognition of the control these positions provide. These diverse asset allocations collectively demonstrate that effective portfolio construction extends beyond mathematical optimization to incorporate individual expertise, interests, and values. Rather than converging on a standardized allocation model, these professionals have developed distinctive approaches that leverage their unique advantages while accommodating their specific constraints. This diversity suggests that personal asset allocation represents an ongoing process of alignment between financial resources and individual circumstances rather than a universal formula.

Chapter 6: Investing for Legacy: Family, Community, and Purpose-Driven Decisions

Financial decisions frequently extend beyond individual well-being to encompass family legacies, community impact, and purposeful giving. Bob Seawright poignantly describes how his mother-in-law purchased a cottage in the Adirondacks specifically "for the express purpose of spending more time in an area the family loved and providing a place for their children and (then prospective) grandchildren to gather." This investment created multi-generational memories and connections that far exceeded its monetary value. Similar family-oriented investments appear throughout these narratives, from education funding to shared experiences. Educational investments feature prominently as legacy-building vehicles. Nearly every contributor with children discusses strategies for funding education, from 529 plans to general savings accounts. Ashby Daniels explains his decision to forgo dedicated 529 accounts in favor of broader taxable accounts: "We do not utilize 529 plans for education because we prefer optionality rather than tax benefits." This approach provides flexibility to support children regardless of their educational paths. These educational investments represent intentional transfers of opportunity rather than mere wealth accumulation. Community investments extend personal legacies beyond immediate family. Tyrone Ross describes the "Tyrone Ross Jr. Athletic Endowment Fund at Georgia Tech" as his "best 'investment' to date," noting the irony that the school once expelled him. Dasarte Yarnway details his investment in Ganta Real Estate Company, aimed at "redeveloping neighborhoods that were to be gentrified and providing affordable housing to those who would otherwise be forced out." These community-focused investments reflect a desire to create positive social impact alongside potential financial returns. Several contributors explicitly discuss charitable giving as an integrated element of their financial strategies. Dan Egan describes maintaining a dedicated goal for charitable donations with high stock allocation, explaining how he strategically donates appreciated securities to maximize tax efficiency. Perth Tolle maintains a charitable gift account with a conservative allocation given its short-term distribution horizon. These structured approaches to philanthropy demonstrate how charitable intent can be implemented with the same rigor as personal financial planning. Business succession and legacy planning also emerge as significant considerations. Alex Chalekian recounts his strategic acquisition of other financial advisory practices, creating a sustainable enterprise that will outlast his direct involvement. Shirl Penney describes Dynasty Financial Partners as a vehicle for supporting advisors who share his values. These entrepreneurial legacies extend professional impact beyond individual careers, creating lasting institutions that embody their founders' principles. Personal values consistently inform these legacy-oriented investments. Perth Tolle's freedom-weighted emerging markets index aligns her professional work with her beliefs about human liberty. Ryan Krueger describes investing in "unusual desires to work" as his "favorite dividend," noting that supporting entrepreneurial ambition can "change more lives for longer" than direct charitable giving. These purpose-driven investments transform financial decisions into expressions of personal meaning and values. These legacy-focused narratives collectively demonstrate how financial planning transcends individual self-interest to encompass multi-generational impact and community benefit. By integrating family needs, community engagement, and personal values into their financial strategies, these experts exemplify a more comprehensive approach to wealth management that acknowledges money as a tool for creating meaningful legacies rather than an end in itself.

Chapter 7: Risk Management: Balancing Growth with Personal Security

Effective risk management emerges as a highly personalized process that balances mathematical probabilities with psychological comfort. Morgan Housel acknowledges maintaining a higher cash allocation than financial theory might recommend, explaining that "cash is the oxygen of independence" and that having a substantial buffer reduces the likelihood of being forced to sell stocks at inopportune times. This perspective reframes cash holdings not as a drag on returns but as strategic protection for core investments. Similar buffer strategies appear throughout these narratives, suggesting that managing downside risk requires both financial expertise and self-awareness. Career risk receives significant attention as a factor influencing investment decisions. Brian Portnoy notes that his "career has an extremely high market beta" as a hedge fund professional, creating correlated risks between his human capital and financial capital. This reality justifies maintaining substantial cash reserves despite the opportunity cost. Similarly, Howard Lindzon explains that his aggressive venture capital investments necessitate higher cash positions to balance portfolio risk. These examples demonstrate how holistic risk management must consider the relationship between career trajectory and investment strategy. Insurance appears as a fundamental but often overlooked risk management tool. Ashby Daniels states, "Insuring ourselves for what can go wrong is what allows us to invest for what can go right." This principle extends beyond traditional insurance products to include strategic buffers against various life contingencies. Josh Brown describes maintaining substantial liquid reserves to fund his daughter's education while simultaneously investing aggressively for retirement. This compartmentalized approach to risk management enables targeted risk-taking while preserving security for essential needs. Diversification strategies vary significantly based on individual circumstances and beliefs. Jenny Harrington maintains a concentrated portfolio of dividend-paying stocks, explaining that "distraction is a bigger risk than concentration" in her investment approach. Conversely, Christine Benz emphasizes global diversification across asset classes. These contrasting approaches reflect different perspectives on the nature of investment risk—whether stemming primarily from market volatility, inflation, personal behavior, or other factors. Behavioral risk management features prominently in these accounts, with several contributors acknowledging their own psychological tendencies and developing strategies to mitigate them. Morgan Housel describes how maintaining a lifestyle below his means reduces the psychological pressure to generate specific investment returns. Ted Seides notes his tendency to impulsively purchase stocks recommended by respected managers, leading him to establish strict parameters for individual stock selection. These self-aware approaches to behavioral risk illustrate how effective risk management must address psychological tendencies alongside portfolio construction. Financial flexibility consistently appears as a risk management priority. Lazetta Rainey Braxton describes her family's "Go to Hell fund"—emergency savings that provide the flexibility to make career decisions without financial desperation. This liquidity creates optionality that traditional risk models might undervalue. Similarly, multiple contributors discuss maintaining substantial cash reserves to capitalize on market dislocations or unexpected opportunities, transforming apparent inefficiency into strategic flexibility. These diverse risk management approaches collectively demonstrate that effective security requires balancing conventional financial metrics with personal psychological realities. Rather than optimizing solely for risk-adjusted returns, these professionals have developed individualized frameworks that address their specific vulnerabilities while enabling sustainable growth. This personalized approach to risk management acknowledges that financial security ultimately resides in psychological comfort as much as portfolio construction.

Summary

The profound insights from these financial experts reveal an essential truth: authentic financial wisdom emerges not from mathematical formulas or universal rules, but from the thoughtful alignment of investments with personal values, histories, and aspirations. Each contributor has developed a unique approach shaped by their lived experiences—from childhood memories of scarcity to professional expertise in specialized domains. The diversity of these perspectives challenges conventional notions of optimal portfolio construction while illuminating a more nuanced understanding of what constitutes financial success. What unites these varied approaches is a commitment to intentionality and self-awareness in financial decision-making. Whether prioritizing independence, family legacy, community impact, or personal passion, these experts demonstrate that meaningful financial strategies transcend mere return maximization to encompass broader life objectives. Their collective wisdom suggests that the most valuable financial education may not lie in learning the perfect asset allocation formula, but rather in developing the self-knowledge to create sustainable strategies aligned with our deepest values. For those seeking to navigate the complex relationship between money and meaning, these personal narratives offer not a map to follow but a compass to guide individual exploration of one's own financial journey.

About Author

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Carl Richards

Carl Richards is a CERTIFIED FINANCIAL PLANNER™ and the director of investor education for the BAM ALLIANCE, a community of over 130 independent wealth management firms throughout the United States. He is the creator of the weekly Sketch Guy column in the The New York Times, and is a columnist for Morningstar Advisor. Carl has also been featured on Marketplace Money, The Leonard Lopate Show, Oprah.com and Forbes.com. In addition, Carl has become a frequent keynote speaker at financial planning conferences and visual learning events around the world.Through his simple sketches, Carl makes complex financial concepts easy to understand. His sketches also serve as the foundation for his first book, The Behavior Gap: Simple Ways to Stop Doing Dumb Things with Money (Portfolio/Penguin). Carl's art appeared in a solo show at the Kimball Art Center, in Park City, Utah. Other showings include The Parson's Gallery in New York, The Shultz Museum, and an exhibit at the Mansion House in London. His commissioned work is on display in businesses and educational institutions across the country. He lives with his family in Park City, Utah.

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