The Silver Rules of FI

The Silver Rules of FI

All both of my readers–and the Bulgarian bots that frequent on my site–have noticed that I haven’t posted recently. The gap isn’t due to a diminished interest in FI. To the contrary, I went down a rabbit hole lined with compelling books by B. Mandelbrot, R. Schiller, and N.N. Taleb. The latter author, who is one of my favorites, writes in his book Skin in the Game:

The Golden Rule wants you to Treat others the way you would like them to treat you. The more robust Silver Rule says Do not treat others the way you would not like them to treat you.

N.N. Taleb

He argues that the Silver Rule is more robust and useful because it favors minding one’s own business. And when advice is given, it is in the form of cautionary warnings; bad things are generally easier to spot than good things. Also what happens if you give good advice, but better advice was available. Have you actually done the person a disservice?

This quote made me think about the type of advice offered by the FI community, including my small blog. There are nearly infinite tweaks you can make that may (or may not!) improve your chances of achieving FI. But a small number of cautions provide most of the heavy lifting.

Examples of Silver FI Rules

  1. Don’t ignore where your money is going.
  2. Don’t invest in things you don’t understand.
  3. Don’t stop learning about investments, even if you think you understand them.
  4. Don’t jump into–or out of–investments hastily or emotionally.

Examples of nearly infinite tweaks

  1. Do I need a tracker to keep track of all these financial trackers? Mint, Personal Capital, YNAB, and others will help you monitor where your money is going so that you can correct course if needed. It doesn’t matter which one you use–or if you use a notebook or Excel file–as long as you are informed. See Silver FI Rule 1. (For what it’s worth–or not worth–Personal Capital works best for me).
  2. Pages and pages of Frugality tips. Many of the frugality tips compiled on ChooseFI are great, but if you try to do them all at once, you will certainly become overwhelmed. Silver FI Rule 1 keeps it simple. Track your spending and adjust if you are not happy with it.
  3. 150 Portfolios Better Than Yours. The list of investment approaches compiled by The White Coat Investor (WCI) shows you can adjust your portfolio ad nauseam in an effort to chase returns. Like The WCI says, it’s impossible to know beforehand which approach will be best. There is no reason to fret or churn a portfolio– see Silver FI Rules 2-4 above instead.
  4. Speculating on a fad investment without due diligence. This is just one example of people being scammed by investing in things they most likely didn’t vet properly. If you’re feeling too rich and can’t find a suitable scam to commit to, just turn on cable news and invest in whatever hot stock pick the charlatan of the hour is pitching. I know several people who have lost good money this way. Silver FI Rules 2 & 3 prevent this type of blunder.

So moving forward I’ll try to favor Silver Content and make it clear when I am sharing Golden Content. And no, the featured image is not a recommendation to buy silver bullion.

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