I started Hack Your Wealth on the eve of getting married. I got hitched on September 26, 2015. It was the happiest day of my life.
First, I’m lucky to have met the best gal a boy could hope to meet. I know now what it means to experience devotion and companionship to someone I love deeply.
This is my wife Kelly. Isn’t she a dish? 😀 ❤
Before Hack Your Wealth
Throughout the early part of my career, I hacked my way into a lot of interesting gigs, often with no formal training. I am ridiculously lucky to have experienced a WIDE range of careers:
- foreign service internships at the State Department in Washington and Vienna
- documentary filmmaking in Asia
- BigLaw in New York and Tokyo
- strategy consulting at McKinsey
- corporate finance as a graduate of the rigorous CFA program
- private equity investing at Huntsman Gay Global Capital
- product management at Pinterest, Redfin, and LinkedIn
During these years while I was earning a relatively high income in law, finance, and engineering, I still squirreled away a lot of savings and continued living like a hobo college student.
I thought this was the path to financial independence (didn’t know about FIRE back then), but the truth is it was REALLY hard to grow wealth this way because:
- I didn’t face the reality that “saving” by itself is not really the way to grow massive wealth
- I had no clear plan or strategy for making my capital/assets work for me
- I did not know or think about creating multiple income streams, even though my job salary (while relatively high) would take me forever to achieve financial independence
And then the financial crisis happened. BOOM.
That delivered me a big cold slap in the face.
In a single 3-month period in 2008, my hard-earned savings got whacked by ONE-THIRD.
I was one of the luckier ones, too. Others took a 40%, even 50% hit.
I was fortunate I still had most of my career to build it back up…but it was a very costly (at the time) lesson.
I grimace when I think about it.
I got whacked because I was invested in stocks and actively managed funds I did not understand well.
And unlike now, I did not have any notion or intuition around target asset allocation, rebalancing, the value of simply holding cash, or even just having an investment policy statement you stick to precisely when the shit hits the fan.
The CFA program (Masters in finance equivalent) taught me a lot of these things, but also just slowly and painstakingly cobbling together knowledge on my own and reading forums and books.
After a couple years, I got a LOT better managing and investing my portfolio and was able to rebuild the wealth I lost.
But it took a ton of work.
I had to stay really disciplined, focused, and consistent.
I also started diversifying my income sources and earning income online.
I built websites selling e-books and videos teaching people how to get into elite law schools, how to break into private equity investing, and how to build financial valuation models and leveraged buyout models in Excel.
Getting married changes the game…I needed to play a bigger game
And then….I met Kelly.
It wasn’t long before a little voice in my head said, “Yup. She’s the one.”
But I knew getting married would mean I’d have to be a LOT more intentional about managing income, expenses, and wealth because life was bound to get more expensive.
Having a family would be expensive. (And certainly Kelly wouldn’t want to live like a hobo college student like I was!)
At the same time, I also wanted real financial independence to be able to retire early and spend as much time freely with my family as I wanted.
I knew I needed to play a bigger game.
I needed to turbocharge my wealth hacking and build strong passive income streams if I wanted to own my own time.
But how much would I need to retire early?
How exactly would I get there?
What should I be doing right now to achieve that?
I already had good spending and saving discipline. But I didn’t know how to strategize for retirement…let alone early retirement.
And what drove me crazy about many personal finance websites…
…was how generic their advice often was.
Like, I’d Google a question about retirement strategies and see post after post of essentially nuggets like:
“Spend less than you earn.”
“Make a budget and stick to it.”
“Pay off credit cards first because they have the highest interest.”
“Save a 3-month rainy day fund, so you don’t have to dip into retirement accounts.”
I’m sure plenty of people find advice like this useful — why else would so many blog posts like this exist? — but I was already saving half my income and managing my money decently well.
What I wanted was really strategic advice on how to massively grow wealth and protect it to retire early, all while raising a family.
I wanted clear financial “how to” lessons I could follow step by step, implement, and see results.
I wanted to study examples of how other wealth hackers cleverly structured their investments to maximize returns and avoid taxes.
Hack Your Wealth is born
So I started blogging to document, in plain language, the most important financial, tax, retirement, investing, and estate planning concepts I was self-learning anyway.
I didn’t plan it but I soon realized I had developed a solid FRAMEWORK for methodically and strategically building our wealth, managing our portfolio (tax efficiently), and legally protecting our assets.
It helped us to focus massively: now our portfolio of liquid assets and real estate is well over several million.
Today, I share in detail on HYW the strategies and hacks we find most useful for building wealth and the lessons we continue to learn along the way.
I write comprehensive step-by-step “how to” guides, like:
- How to avoid capital gains taxes when selling your house
- Why a Solo 401k beats all other retirement accounts
- Traditional vs. Roth? How to double-dip the tax benefits of BOTH
- Life insurance: How to calculate exactly how much you need in 4 simple steps
- How to set up a living trust…and why doing it now will save LOTS of time and money later
- Tax loss harvesting and tax gain harvesting step by step
- The ultimate tax shelter: How health savings accounts work
What makes HYW different is that you can:
- Learn advanced wealth building strategies, explained in plain terms
- Get complex rules translated simply like home sale capital gains exclusions or Solo 401k rules
- Analyze quantitative data comparing financial strategies to show you clearly which is better for your situation
I also share all the tools I personally use (and recommend) to help me organize my financial life, grow income, and optimize expenses. I share it all openly so you can learn and incorporate what works for you, too.
I deeply believe knowledge about wealth building is the most empowering thing you can learn.
If Hack Your Wealth provides valuable insight to help you toward financial security and inspire you to take action and grow your wealth so you can spend more time with family and loved ones, then that is the most impactful thing I can do.
…Now I want to hear your story:
What is your single biggest challenge when it comes to building wealth?
Email me and tell me: andrew at hackyourwealth dot com.
Or even just share feedback or a suggestion.
I read and respond to EVERY thoughtful email and your feedback directly shapes what I do on this site.
Lastly, sign up below to get my top 5 free tools to help you build wealth and minimize taxes. I’ll send you wealth building tips and strategies not even found on this blog.
And follow us on Facebook, Twitter, and Pinterest for our latest content.
I hope to hear from you!
– Andrew
Good evening Andrew,
I read your article on capital gains on selling a primary residence. I have some questions about the non qualified use of the principal residence?
I stayed with my Mom for 5 months (October 9, 2021 to March 12, 2022) after the death of my step-father. I stayed with her so she wouldn’t be alone after his passing. After the 5 months I went back to my primary residence. During that time she asked me if I would sell my home and come live with her permanently. I thought about it and eventually I did decide to sell my home and moved in with her permanently. Would I count those 5 months toward non qualified use?
In addition, I moved out of my residence 3.6 months prior to to the sale of my home. I moved out all personal items on September 18, 2022. The house was listed for sale on November 6, 2022 and the house closing and sale was on January 9, 2023. During that time I was still maintaining the home but was no longer living there. I did a change of address 3 weeks (24 days) before closing on the property and changed my driver’s license address approximately 2 weeks after selling the home. Would moving out of the residence prior to the sale of my home count as non qualified use?
The total time away from the home during the last 5 years was approximately 8.8 months which occurred during the last year of owning the home. I did take 1 week vacations here and there as well.
Would being away from the home that long have any impact on my exclusion deduction amount especially during the last year of owning the home? I did not buy another property prior to the sale of my home, This is the only home I’ve ever owned or sold.
I have owned the home since May 23, 2003 and sold on January 9, 2023.
Kind Regards
Cassandra
Hi Andrew, Your examples on how to avoid capitall gains taxes were very good. I’m hoping you might give me advice for my daughters situation. I sold my condo to access the equity so my daughter could purchase a home. She did last April in AZ, where she had recently moved to 2 yrs ago. She was born and raised in WA state where I reside. She has found herself in a situation, where is now pregnant, with no support from the man involved. She is alone in AZ without support while being pregnant and having her child. She cannot afford childcare, and wishes to move back home with me, which is fine. Would she qualify for the partial capital gains credit? Lets say she might have 85k profit after she sells her house. She might have a high risk pregnancy as she has PCOS which lends to having diabetes while pregnant, and I myself had pregnancy complications. Also she wants to find a remote type of job where she can work from home, and eventually get into her own apartment. Thank you for any advice you may have. I am trying to help her through this difficult time.
Andrew – I have discovered your podcasts over the past week. I listen to a lot of financial planning-type podcasts, and yours is the BEST I have found so far. I am 62 years old and retired 6 years ago. Today I listened to Episode 48, How Medicare Works. WOW – This was so informative, and gave me several insights that caused me to update my spreadsheets with better information on budgeting for medicare and healthcare in general down the road.
I have also recently listened to multiple episodes on estate planning. My wife and I have disclaimer trusts accounted for in our wills. I know that I need a better understanding of disclaimer trusts, and I didn’t hear anything in the podcasts on these. Is there a podcast I may have missed that discusses disclaimer trusts?
Thank you, and keep up the great work!
Don
Thanks for the kind comment Don! Glad you found the Medicare episode so informative. I don’t have an episode on disclaimer trusts but I’ll keep it in mind for a potential future episode!
Andrew, love the HYW vision to move past the more pedestrian online advice that is ubiquitous in articles and blogs and to get to the more specialized and esoteric methods and approaches that are less documented.
Single biggest challenge these days is portfolio diversification across investments with low correlation, some amount of yield, and low correlation. I carry a bit more cash than I’d like but real estate is a bit intimidating given the interest rate risk. DC home prices are where they were in 2008 and I don’t trust folks’ ability to repay debt…we are likely heading for another correction soon. I tried Lending Club recently and after 3+ yrs, the yield was no more than a certificate at my local credit union. Their underwriting standards for A and B loans are horrific causing significant write-offs that would’ve made this investment superior to bank CDs. It’s too bad that even 750+ credit score debtors default with an alarming rate as they do…either that or Lending Club is profiting off other people’s capital. Never again Lending Club!
Understand your preference is real estate towards the creation of multiple revenue streams. Curious what your liabilities are relative to that passive income. What are the risks that keep you up at night? Does real estate obstacles to entry too risky for med-high net worth folks like me? I mean, I can put together a portfolio that has a ~100% of getting me through 30 yrs of retirement with a modest annual income. Why should someone risk that by leveraging debt for income at the risk of catastrophe?
Thanks.
Hey Phil, w/r/t real estate, taking on debt to invest in rental properties isn’t risky if analyzed and structured thoughtfully. I worry zero at night about my real estate debt bc I analyzed the scenarios pretty thoroughly and factored that into my underwriting assumptions. I’m not saying real estate is for everyone (it can be a real PITA sometimes), but it works for some.
The reason “why real estate” as a key *passive* diversified income stream is because it cash flows well, if acquired correctly. In the most ideal case, it cash flows well enough to cover all your living expenses, so you never have to touch any underlying principal, either from your real estate portfolio or your securities portfolio.
Real estate has some risk, as does any investment, which is why there is no shortcut around putting in the time/energy to due diligence an opportunity before writing a check against it. If your net worth is med/high, I don’t think the issue will be obstacle to entry – it’ll be finding and acquiring good deals.
If you have sufficient means to put together a securities portfolio of zero-risk bonds (which is what 100% means) that will get your through 30 yrs retirement, then that’ll certainly be less (in fact, zero) hassle. It depends on what you need / are content with in retirement in terms of annual spend.
I find great value in listening to your podcasts. I am particularly thankful for the insight you shared on Episode #4 regarding Backdoor Roth IRA conversions. I now better understand the Pro Rata rule and how to use my 401k to mitigate taxes incurred due to this rule. I will be taking steps to move pre-tax dollars out of my IRA to my 401k as a result of this better understanding. I’ll be listening for more impactful information on future podcasts. Thanks for sharing your knowledge of wealth building principles.
Glad you’re getting value from the podcast!
Thanks for sharing your insight!
I admire people like you that have no fear of failure or of starting something new. I wish I had the vision (ideas) of what I could to generate more wealth, and the time to become expert enough to execute those ideas. It seems you have experience to hopefully make earning side income (for starters) a little easier than it seems to an outsider like me. So I look forward to following your ideas and see how I might change how I go about increasing my wealth.
Thanks Steve!