New For 2019 The Great Acorns Trial of 2019

I spent part of December simplifying my banking situation, I’m hoping to leave my longtime National Bank relationship for a local credit union that offers a checking account that bears 3% interest. … It seems like a no brainer!

As I transition my spending to the debit card at the new institution, I want to see if I cant find a way to stimulate some savings without it making too big of a splash on my normal budget. I’ve decided to give Acorns a try for the first 6 months of 2019.

Acorns: Round up your debit card transactions!

Acorns is a Financial app that syncs up with your bank account to round up the transactions from your debit card as if you were throwing your spare change in a coin jar. I’m really curious to see what sort of impact is has on my savings in 2019.

Because I’m an extremely active user of YNAB so we will see how using this service actually works in practice. Acorns tracks the amounts of your rounded up transactions until the total reaches 5 dollars, and then they pull the 5 dollars from your account, because of this, I’ll likely have to do small adjustments to my budget as the withdrawals happen.

Once money is in Acorns, you can select between 5 different portfolios:

  • Conservative (20% stocks, 80% bonds)
  • Moderately Conservative (40% stocks, 60% bonds)
  • Moderate ( 54% stocks, 6% REITs, 40% bonds )
  • Moderately Aggressive ( 72% Stocks, 8% REITs, 20% bonds )
  • Aggressive (90% Stocks, 10% REITS)

I’ve selected the Aggressive portfolio. The stock market right now is a wild ride, but I’m not looking to retire in the traditional sense with purely stock investments and dividends, so I’m ready for a long ride!

More ways to add to your account

You can add money to your account via a direct deposit- like a traditional investment account, but there’s also a program called ‘Found Money’ which is essentially a list of companies that if you purchase things with your Acorns Activated Card, they will add more money to your account, there are Found Money deals from:

  • Hulu
  • Moosejaw
  • Nike
  • Sam’s Club
  • Thrive Market
  • Zappos
  • and many more.

I am going to take a look and see if any of these are potential places for me to funnel my purchases towards, but right now I’m not spending a lot of extra money outside of groceries.

My plan for Acorns is to spend the first 6 months of 2019 optimizing purchases to leverage the Acorns platform, and then transition to a new experiment for the end of 2019. — I’m currently thinking about doing a credit card churning experiment for the second half of the year!

Do you have any experience with Acorns? What do you think?

Do you do cool things with your spare change?

What is Financial Independence?

Much of this blog revolves around my journey to Financial Independence. But what does that even mean?

Simply put- a person has reached financial independence when the income that’s produced by their assets can pay for their living expenses indefinitely.

Or put even simpler.

They no longer have to work for money again in their life.

This is the goal- and the primary focus of the FIRE community- they want to reach Financial Independence, and then Retire Early. That’s music to my millennial ears.

Personally, i’m most interested in the Financial Independence portion of the definition. Because i’m self employed and i’m always coming up with some other idea to make some money, I don’t know that i’ll ever truly retire. That being said, I want to get to the point AS SOON AS I CAN where my decision to work every day is coming from the desire to do that work, rather than feeling like I need the money.

Me being an absolute nerd.

I’ve mentioned Rich Dad Poor Dad a few times on this blog already in the 3 months I’ve been writing for Margin Studies. The definition of wealth he used in the book was fascinating to me.

Wealth is a person’s ability to survive X number of days forward.

R. Buckminster Fuller

That begs the question: How many months forward can you survive?

Last week, during a 30 minute drive to go visit a client, I became obsessed with this idea of creating my own type of retirement calculator. Essentially, I listed out the amount in my bank accounts and retirement accounts, and calculated how many months forward I could survive given my current investment and passive income, as well as my current level of expenses.

In theory (one with many nearly false assumptions like…. What happens if my health care costs go up in the future? Not accounted for… so yeah. ) , if I can get to a point where I still have money left in my nest egg by the time I hit age 100, I should be good to transition into a state of ‘retirement.’ Even though there are a lot more factors to build into my model in the future, I know that as soon as my assets are covering the rest of the months of my life, that I’m close to the end…… but I’m not close to the end at the time of this writing.

I hit my centennial birthday in over 800 months, and right now my level of wealth only projects me forward 8 months. So there’s room to grow. The beauty of this model is that there’s a few ways for me to extend this runway.

  1. Have a higher amount in liquid savings and retirement. — This model does NOT figure in the value of my house, but it does figure in the fact that I have roommates. By adding to my investment accounts, it not only adds to my total for investment income, but it also provides a larger balance to chip away at as this runway gets longer and longer.
  2. Increase my passive income. — If I can find more ways to have income come in month after month after month, my runway gets longer MUCH faster. If I can find a way to add just 200 dollars a month to my passive income, my current runway goes from 8 months to 10 months. I can think of a TON of ways to make another 200 dollars a month.
  3. Decrease my monthly expenses. Similar to point number two: finding an extra $200 dollars a month extends my current runway from 8 to 10 months.

This sounds a little like Margin Studies to me 🙂

Chris Guillebeau, in his Side Hustle School Podcast had a guest on his podcast during his first year of shows, and the person he was featuring had a really cool alternative definition to financial independence, and it went as follows:

Create 5 independent businesses, that are each spinning off 2000 dollars a month.

Essentially, if you had this level of income producing business assets, you’d be Financial Independent as long as you’re not spending over 100k in a year!

If I were to look to build a couple side business assets, I could hit a form of this financial independence assuming i could attain another $1500 in passive income.

What are you doing to move towards Financial Independence?

December Wall Chart and Net Worth Report

November's Wall Chart and Net Worth Report

A new year brings a new month, and a new month brings another update to the Margin Studies Wall Chart and net worth report series!

The Wall Chart is borrowed directly from Your Money or Your Life, which is one of the cornerstone books of the FIRE movement. By consistently keeping track of all of your money coming in and out, you can start to make better decisions as to how you spend your life energy.

I use the YNAB software for all of my budgeting, and I LOVE it. I’m currently resisting the urge to tell all of my friends. I’m sure an official review of the software will happen in the coming months.

December’s Wall Chart Report:

This month I come back down to earth a little. But I expected this. A couple things entered into the equation here.

One. I’m no longer paying myself my self employment taxes

When I first started using YNAB to track my budget, I had this brilliant idea to combine my business budget onto the same worksheet as my personal budget, but after I spent some time reading Profit First.

The business finance system laid out in the book involves opening up different bank accounts, and distributing your income a couple times a month into the different accounts.

I loved the book and implemented the system right away, but it was going to make my budgeting VERY messy. So I split up my business and personal budgets, and because I’ll be paying my taxes from my business, I’m not paying myself that extra amount.

Two. My old business is officially shut down.

As of this summer, I transitioned into a single owner LLC, and me and a business partner decided to close up our existing business. As of last week, i’ve received my last disbursement from that business. So i’m no longer collecting two job’s worth of income 🙂

Three. Seasonal depression is a thing.

The amount of gray that we’ve lived through in Michigan the last two months is ridiculous. I’m attempting to fight this by getting to the gym 5 days a week, and cutting out fast food. I know it will work… I’ve lost a good amount of weight in the past, and a lot of it has crept back, but I feel pretty determined to start making better and better decisions. FI is about the aggregation of marginal gains, right? Well, health is too.

Four. Spending was up. ¯\_(ツ)_/¯

My house insurance bill came, so that was a bigger expense that I had been saving for. I also had some Christmas Gifts to purchase, as well as the seemingly endless opportunities to meet friends for beers or coffee or dinner. It was a rough month for my entertainment budget.

The numbers:

Income: $5,390.60

Spending: $3,460.17

Margin: $1,940.43

I mean… I still saved some… I’ve also decided to start putting in the 4% calculation, the calculation when, once that number reaches my expenses number, we can say I’m officially financially independent.
We’re aiming for up and to the right. so we’re still winning.

Net Worth as of 1/1/2019 : $76,997.86

This number is an increase of $1,127.07 over what I had calculated in last months’ Wall Chart / Net Worth Report. Given that we saw a big shift in the stock market over the last month, I was pleased to still end up ahead. I plan on creating a Goals post later this week, as it’s a very new years kind of thing to do. I think this is the year where my net worth reaches beyond 100k! I know other net worth trackers around the internet tend to go into how each account fluctuates to reach that number. Is that something that interests you guys? I could see it being helpful!

Investment Study – Update 1. Things are going to get interesting.

I first wanted to start publishing the Investment Study on margin studies when I first purchased the domain back in September of 2017, so I’m kind of kicking myself for not starting sooner, as it would be really interesting to have seen the performance of these portfolios over the last 15 months. That being said, I did not expect to be so interested to see how these portfolios have performed over the last two months.

If you haven’t read up on the investment study, feel free to check it out here, otherwise, lets move on 🙂

… I don’t know if you’ve seen the news. Or heard your Uncle Lester moan about his retirement accounts. Or heard the boastful cries of the crypto police as they’ve come out of hiding for the first time since last Christmas.  For the first time in a decade, we appear to be moving towards a bear market. A bear market is a period of time with falling stock prices. Not ideal, but ultimately if we believe in the strength of the United States economy, these are just hiccups on our way towards retirement.

On the heels of a Government Shutdown, our US stock market has been experiencing decline over the last few months, and that decline has taken a sharper turn toward over the last couple weeks. And this makes this investment study MUCH more exciting. Changing market conditions will give us the opportunity to see how different portfolio compositions react over time.

Before I get to the scorecards, I have a couple notes I want to make.

The Dollar Cost Averaging Study.

Since November, I’ve decided that I’d like to look at the effect of Dollar Cost Averaging on this study. Dollar Cost Averaging is splitting up an investment deposit into multiple smaller deposits, this is to reduce the risk of investing all of your money at the top of the market. Some experts argue, that if the overall trend of a market is up, the sooner you get your money in, the better. However, Dollar Cost Averaging is exactly how most of us invest in these markets. We invest our money as we get earn it.

So as of this update, the Investment Study now has two parts:

  1. The original study — how does a one time investment of 10,000 perform over time?
  2. The dollar cost study — how do these portfolios perform while also receiving smaller deposits every two months. For simplicity, I’m adding $500 a month to each portfolio’s balance, or $1000 every two-month update.

With the addition of the Dollar Cost Averaging Study, I’ve also added a sixth portfolio, mostly for the peace of mind of Uncle Lester.

Introducing The Mattress Portfolio:

This portfolio is …. if you just took all of your savings and hid it under your mattress.

100% dollar bills y’all.

Hopefully over time, each of the other portfolios will far exceed the performance of the Mattress Portfolio, but for this update, those who would have hidden money in their granddad’s grandfather clock would have permission to strut around and look important.


Current Score Cards: Investment Study Version 12/26/18

Static Investment Study:

The Mattress is winning and I hate it.

Dollar Cost Averaging Study:

If this looks familiar, it should. However, as these portfolios continue to receive an influx of cash every two months, I believe that at some point the Dollar Cost standings will look different than the Lump Sum standings.

A look into each portfolio…

If you’re interested in learning more about each specific portfolio, they are described more in detail on the Original Investment Study post.

The Ivy League Portfolio

The Ivy League Portfolio experienced a 7.9% loss to $9,211.63 over the last two months, largely driven by the large losses in the US stock market, as well as foreign markets. To rebalance the portfolio back to the portfolio’s original allocation, two shares of IEF ( US intermediate term bonds ) were sold to purchase additional shares of US and Foreign ETFs.

The Midwest

The Midwest Portfolio, a portfolio comprised of ETFs and modeled after Ray Dalio’s All Weather Porfolio, performed the best over the last two months with a loss of only 1.98% to $9,801.63. To rebalance, shares of Bonds were sold to purchase additional shares of US stocks as well as additional commodities shares.

The Risky Robots

This aggressive robo-advisor based fund experienced a loss of 9.33% to $9,067.12 since the first of November. For rebalancing, shares of emerging market stocks, corporate bonds and emerging market bonds were sold to increase exposure to dividend yielding stocks (VIG) and foreign stocks (VEA).

The Simple Path

Because this portfolio is made up of 100% US stocks, this portfolio took the largest hit over the last two months.  The portfolio value dropped 13.91% to $8,609.17 since November 1st. That hurts. I know this is the allocation of many of us within the FIRE community and even though I agree with many of the arguments behind the portfolio, it struggles during these types of events.

Because this portfolio is only made up of one stock class, no rebalancing will ever be needed throughout this study. (… and honestly that’s so nice and simple)

The Smoother Path

The Smoother Path portfolio also experienced a heavy drop, falling 12.35% to $8,765.38. To rebalance, one bond share was sold to buy an additional share of VTI

Things have gotten interesting!

I’m really intrigued by how the Midwest Portfolio endured the last couple months, even though the portfolio still lost money, it performed 6% better than the next best portfolio. This update has me more excited about the investment study. This information is not meant to be investment advice, this isn’t even meant to show my opinion on the best way to invest. Now I just want for these portfolios to beat the mattress.

I scheduled the next update of the investment study for February 27, 2019.

How are you doing? How are your investments doing? … you’re not selling are you?

What is Margin Studies? Start Here.

I started writing Margin Studies because I wanted to share some of the things I was passionate about, but do it in a way where I was comfortable exploring all aspects of my finances and entrepreneurial journey. I decided to start the blog in a semi anonymous way and start publicly tracking both my net worth as well as my journey down the path to financial independence as laid out by Vicki Robin in Your Money or Your Life.

Margin Studies graph

As I looked at ways for me to improve my finances, I imagined a graph that showed both my income and my expenses. Can you tell i’m a numbers guy? (Insert cliche millennial sweat emoji) I realized that improving my finances came down to these three things.

  1. Increase my monthly take home income
  2. Decrease my spending.
  3. Find ways to invest as much of the difference as possible

These three things are essentially the core of Margin Studies. Enter your email address below to be added to the Margin Studies newsletter- this will allow you to be notified when I publish new content!

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1. Make More Money

The amount of money you make is ultimately your decision. Nobody else in your life has control over how much money you make, except for you. If you want to make more than a barista, take a new job! If you want to make a million dollars, you can! … You just might have a few skills to learn along the way.

As you look to optimize your monthly cash flow in and out of your accounts, you will likely find a point where it’s very difficult to find additional things to reduce or remove from your budget, but there’s always room for you to increase your earnings potential.

Because I’m self employed, many of the things I write about in regards to making more money pertain to starting new projects, side hustles, and increasing sales.

Explore posts about making more money.

2. Spend Less

When you first start down the path to Financial Independence, one of the best things you can do to get some quick wins in building up your monthly margin is finding ways to spend less money.

It’s easier to find an additional $100 of margin money every month by finding ways to save money, rather than finding an additional $100 of income. Why is that?


In order to find an extra $100 in your budget, you just simply need to reduce your spending by $100. In order to earn an extra $100, you actually have to earn $130, have donald take 30 of it, and then you have your $100 to invest.

There’s a lot of room for me to still spend less money every month. These posts detail out the ongoing process.

Explore posts about spending less money.

3. Invest as much of the difference as possible.

Once we have money left over every month, we need to put that money to work somehow! These posts will discuss the investment strategies that I’m exploring further.

According to Rich Dad, Poor Dad, the biggest difference between rich and poor people is that rich people spend their money on assets that ultimately pay for their day to day living expenses, where poor people waste their money on things that end up costing them more money (vacation homes, xboxes, car leases, iPads).

Explore posts about doing better with the difference.

4. Bonus Features:

Aside from the three categories of posts listed above, I’m also currently featuring two sets of posts that will track progress over time right now. These two sets are:

  1. The Margin Studies Investment Study.
    I am currently tracking a number of different investment portfolios with the hopes of studying the way each of these portfolios responds to the marketing conditions of the next few years.
  2. Monthly Wall Chart and Net Worth Reports.
    I am diligently tracking my net worth and also publishing my Income / Expense numbers to share my journey down Vicki Robin’s Your Money or Your Life process.

I hope you’ll join me on this journey! Enter your email address below to be added to the Margin Studies newsletter- this will allow you to be notified when I publish new content!

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