Guides
Plain-English explanations of the things money runs on — taxes, credit, index funds, mortgages, retirement accounts. Every guide cites its sources, and each one is a lesson from the Compound course.
Markets & investing
- Roth vs Traditional: One QuestionTraditional = deduction now, taxed later. Roth = taxed now, tax-free later. Roth wins if your future rate is higher; Traditional wins if it's lower.
- IRAs: Limits, Phase-Outs, and the Backdoor2026: $7,500 IRA limit. Roth eligibility phases out at $153,000-$168,000 for single filers. The backdoor exists, and so does the pro-rata trap.
- The 401(k) and the Free Money Problem2026 limits: $24,500 employee deferral. A 50% match on the first 6% of pay is an instant 50% return on those dollars.
- The HSA's Triple Tax Trick2026: $4,400 self-only, $8,750 family, and you need an HDHP to qualify. Deductible in, tax-free growth, tax-free out for medical.
- Funds: Mutual, ETF, IndexMutual fund and ETF describe the wrapper — how it's priced and traded. Index and active describe the strategy. Any combination exists, and the strategy is where the fees are.
- Fees: The Silent 0.80%Index equity ETFs average about 0.14%; index equity mutual funds about 0.05%; equity mutual funds overall about 0.40%. Actively managed equity funds sit well above that blended figure. The gap compounds for decades.
- Diversification and What It Can't DoDiversification removes company-specific risk, not market risk. Correlations rise in crises, which is exactly when you wanted them low.
- Asset Allocation: Tolerance vs CapacityRisk tolerance is what you can emotionally handle. Risk capacity is what your finances can absorb. Plan around the lower of the two.
- Rebalancing and the Glide PathRebalancing restores your target mix by selling what grew and buying what lagged. Target-date funds automate this, plus a glide path toward bonds.
Money foundations
- Marginal vs Effective: The Raise MythOnly the dollars inside a bracket are taxed at that bracket's rate. A raise can never lower your take-home pay.
- Capital Gains and the One-Year LineHold more than one year and gains get 0/15/20% rates. Hold a year or less and they're taxed as ordinary income, up to 37%.
- APR, APY, and the Rule of 72APY includes compounding, APR doesn't. Rule of 72: divide 72 by the rate to get years to double.
- What a Credit Score Actually MeasuresFICO runs 300-850. Payment history is 35% and amounts owed is 30%, so two factors drive nearly two-thirds of your score.
- The 30% Rule Is a Myth (Sort Of)There is no 30% cliff. Lower utilization is simply better, and people with the highest scores average in the single digits.
- Avalanche vs SnowballAvalanche (highest rate first) minimizes interest. Snowball (smallest balance first) improves follow-through. The best plan is the one you finish.
- Credit Cards: Grace Periods and the Minimum Payment TrapPay the statement in full and the grace period makes borrowing free. Carry a balance and you're paying about 22% while the grace period disappears.
- Mortgages: 28/36, PMI, and Rate Math28/36 caps housing at 28% of gross income and total debt at 36%. Under 20% down usually means PMI, and rate changes dwarf everything else.
Tax strategy & estate
- Tax-Loss Harvesting: Turning Losses into Tax SavingsRealised losses offset realised gains dollar-for-dollar, then up to $3,000 of ordinary income a year, with the rest carrying forward forever. Buying back within 61 days disallows the loss.
- FIRE Withdrawal Strategies & the 4% Rule4% was a finding about a 30-year horizon and a specific portfolio mix, not a law. It's a good planning anchor, and a longer retirement, taxes, and a bad first few years all push the sustainable number lower.
Real estate
- Rent vs. Buy Math: Opportunity Cost & Unrecoverable CostsCompare unrecoverable costs on both sides: rent against interest, property tax, insurance, maintenance and the return your down payment isn't earning. Only the principal portion of a mortgage payment builds anything.
- Total Cost of Homeownership: PITI, HOA, and MaintenanceYour real monthly cost is PITI plus HOA plus a maintenance reserve of roughly 1–2% of the home's value a year. The parts the mortgage calculator omits are the ones that don't shrink as you pay the loan down.
- Rental Property Math: NOI, Cap Rate, & Cash-on-Cash ReturnNOI describes the building. Cap rate prices the building. Cash-on-cash measures your deal, after financing. NOI deliberately excludes debt service, which is why two buyers compute the same NOI and very different returns.
- REITs (Real Estate Investment Trusts): Liquid Property InvestingA REIT must distribute at least 90% of taxable income. It isn't tax-exempt — it's a taxable corporation that deducts what it pays out, which is why the yield is high and why the dividends are mostly taxed as ordinary income.
Behavioral wealth & protection
- Term vs. Whole Life InsuranceMost people need income replacement for a fixed span of years, which is exactly what term is built for. Permanent policies bundle that with a high-cost savings product; separating the two usually buys the same coverage for a fraction of the price.
- Health Insurance HDHP vs. PPOAn HDHP trades predictable premiums for a lower fixed cost and a larger worst case, and it is the only plan that makes you eligible to fund an HSA. Compare total annual cost at your realistic usage, not the monthly premium.
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