<aside> 💡 Money is a means. Not an ends.


Matching Cash Flows

For most of us, investing is about trying to smooth the lumpiness of our income to consumption. When we are in college or young adults, we typically consume more than we earn with loans bridging the difference. When we get old, our spending is financed by withdrawals from our savings. In between, we may have emergencies, college bills for our children, or any number of life specific circumstances (or desires) that require extra funds to cover.

This wiki approaches the goal of investing from this lens. It assumes your goal is to match your assets to your expected liabilities. Investing is just one tool towards bridging this goal. In fact, financial investing alone will probably be insufficient if lower expected returns are a "new normal".

This wiki is designed to give you the tools to think about investing. To give you the best shot of success however you define it on that front. Investing in your human capital will be higher yielding. We'll talk about that too.

Investing is prescribed to smooth your cash flow. It's my focus. But it's worth mentioning that there are other goals such as "financial freedom". The knowledge and reasoning you acquire on investing will apply to the pursuit of those goals as well. You are not wasting your time learning.

What About Extreme Goals?

While most of us would be content to ensure a desired standard of living until we pass plus some leftovers for our family, I'd be naive not to acknowledge two additional motivations that draw people towards investing.

  1. You want to be extremely wealthy
  2. You want to give away lots of money to loved ones or a cause

Lets's discuss. They face the same reality — investing is not enough.