Kristy Shen > Quotes

“The more stuff people owned, the unhappier and more stressed they tended to be. Conversely, the less stuff people owned and the more they spent on experiences like travel or learning new skills, the happier and more content they were.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“According to business and economics professor Paul Harvey, “a great source of frustration for people with a strong sense of entitlement is unmet expectations.”1 If you believe that you’re special, and all you have to do is find your singular passion and turn it into a perfect job, that’s a recipe for disaster. The reality is that the world owes you nothing. You only become “special” by developing skills that are in demand, which takes focus, grit, and long-term work.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“One of the biggest lies we´ve been sold is that following our passion is the key . Statistically, following your passion will lead to unemployment or underemployment”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“Every year, measure the overall health of your early retirement plan by plugging your current assets and expected spending back into FIRECalc (“Perpetual Re-retirement”). This makes the Trinity study valid for retirements longer than thirty years since each time you do this, you are creating a new thirty-year retirement scenario.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“How to Steal from Wall Street If you ever want to see a banker sweat, try this: walk into your bank, ask to see a salesperson, and ask to put your savings into index funds. It’s the funniest thing ever.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“That’s when I realized it was really very simple. Index investing beats 85 percent of actively managed mutual funds.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“Here’s how it works. If you know the return you’re earning on an investment (say, 6 percent per year), divide 72 by that number (72 / 6 = 12). This gives you the number of years it’ll take for your money to double. If I invest $1,000 with a return of 6 percent a year, it’ll compound into $2,000 in 12 years without my investing another cent. That balance goes up over time, because the money I make makes more money, which in turn makes even more money.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“in order to be truly creative, constraints are necessary. If you’ve ever tried to write a novel, you know what I mean. Staring at a blank computer screen feels debilitating. With infinite directions to pursue, you end up paralyzed. But by imposing some constraints—like learning how to structure your paragraphs, build a story arc, and write a scene, or doing a writing exercise—you start to see a path forward.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“There are parts of every passion that, when turned into a full-time job, suck. I love writing, but that doesn’t mean I love rewriting chapters over and over again, or getting rejection letters from agents, or poring over the dense legalese of a publishing contract until my eyes bleed.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“The Freedom Mind-set shifts your thinking, from money being the most important to freedom being the most important. Once your needs are taken care of, the next step shouldn’t be hoarding. It should be getting your time back.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“In China, Coca-Cola is called “Kekou Kele,” which means “Tasty Fun.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“Check out TravelCards.CardRatings.com to find the best reward cards.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“After you retire early, you can access the money in your 401(k) without paying a penalty by building a five-year Roth IRA conversion ladder.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“you have to multiply your monthly mortgage payment by 150 percent. This is how much your house will actually cost per month, once all expenses are factored in. If that Rule of 150 monthly cost is higher than your rent, then it makes sense to rent. If it’s lower, then it makes sense to buy.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“For reference, here are a few ETFs that invest in the preferred share indexes: Name Country Ticker iShares S & P/TSX North American Preferred Stock Index Canada XPF iShares US Preferred Stock USA PFF PowerShares Preferred Portfolio USA PGX”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“Second, Modern Portfolio Theory works best if all your assets are in index funds. If there’s even a single individual stock in your portfolio, it could lead to trouble. While it’s impossible for an index fund to go to zero, it’s entirely possible for an individual stock to go to zero. And if that happened, rebalancing would guide you to sell off every other asset in order to buy more of the failing stock until it was all you owned and the company went bankrupt, swallowing your entire life savings along with it. Don’t own individual stocks in a portfolio that you plan on managing with Modern Portfolio Theory!”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“JL Collins brilliantly described this as a “self-cleansing” mechanism, and that’s exactly what it is. Owning the index means you only own the biggest, healthiest companies and makes sure you get rid of shares of bad companies before they hit zero. (Note that the only major American index not to use this methodology is the Dow Jones Industrial Average, which is price weighted rather than market-cap weighted.)”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“You would report 2 percent of the $500,000 (or $10,000) equity ETF in dividend income on your tax return, and not report anything in interest since those bond ETFs are in tax-sheltered and tax-deferred accounts where investment gains are tax-free. Your total tax bill comes out to $0.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“Following the 4 Percent Rule still gives you a 5 percent chance of running out of money, due to a phenomenon known as sequence-of-return risk. Your backup plan is to use the Cash Cushion and the Yield Shield. Cash Cushion: A reserve fund held in a savings account that you can use to avoid doing a full portfolio withdrawal during down years. Yield Shield: A combination of dividends and interest being paid by your ETFs that is delivered as cash without selling any assets. The Yield Shield can be raised by pivoting some of your assets into higher-yielding assets, such as . . . Preferred shares Real estate investment trusts (REITs) Corporate bonds Dividend stocks The size of the Cash Cushion is determined using the following formula: Cash Cushion = (Annual Spending − Annual Yield) × Number of Years”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“Capital gains harvesting can be used to eliminate capital gains taxes. Every year, realize as many capital gains as you can inside your 0 percent tax bracket by selling some ETF units. Shortly thereafter, rebuy those units back to reset your cost basis.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“Luca Pacioli’s Rule of 72. Here’s how it works. If you know the return you’re earning on an investment (say, 6 percent per year), divide 72 by that number (72 / 6 = 12). This gives you the number of years it’ll take for your money to double. If I invest $1,000 with a return of 6 percent a year, it’ll compound into $2,000 in 12 years”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“Chinese citizens have an average savings rate of 38 percent.1 That is massive compared to the American rate of 3.9 percent and the Japanese rate of just 2.8 percent.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“Accepting and pushing through pain without complaint or anger is how you build character.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“Cash Cushion = (Annual Spending − Annual Yield) × Number of Years This is the portfolio I started out with: Asset Type Allocation Yield Bonds 40% 3% Canadian Index 20% 2.5% US Index 20% 1.75% EAFE Index 20% 2.5%”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“At the beginning of each year, fund the Current-Year Spending bucket: First, transfer the cash generated by your Yield Shield. If your portfolio is sitting on a gain, sell off some ETFs to make up the difference. If your portfolio is sitting at a loss, make up the difference using your Cash Cushion. Remember to replenish your Cash Cushion when markets have recovered. Have multiple backup plans you can implement in case of an extended market downturn: Backup Plan #1: Use your Yield Shield. Backup Plan #2: Use your Cash Cushion. Backup Plan #3: Use geographic arbitrage to reduce your living expenses. Backup Plan #4: Start a side hustle. Backup Plan #5: Temporarily return to work part-time.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“Tax deferment, on the other hand, is the process of taking a chunk of your income and choosing not to pay income taxes on it that year.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“Index investing allows you to invest in all companies at once rather than trying to pick out the winners. Indexes can’t crash to zero. Index funds have lower fees. Index funds beat 85 percent of all actively managed mutual funds after fees.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“MSCI EAFE Index. MSCI is the company that maintains it, and EAFE stands for “Europe, Australasia, and the Far East.” Like the S & P 500, it works nicely as a market-cap-weighted index of the developed world outside of North America and is the oldest international stock market index out there, having been founded in 1969.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“take my yearly living expenses, multiply by twenty-five, and get my target portfolio size. (Dividing your living expenses by 4 percent is the same as multiplying them by twenty-five. That’s why the 4 Percent Rule is also called the Rule of 25.)”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required

“Tax optimization is the process of putting your assets into the right accounts so you reduce (or eliminate) taxes post-retirement. Put assets that pay interest or non-qualified dividends in your tax-deferred or tax-sheltered accounts. Put assets that pay qualified dividends in your normal investment account.”
― Kristy Shen, Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required