Nick Maggiulli is one of the most brilliant financial writers on the internet.
His WordPress blog Of Dollars and Data, book Just Keep Buying, and X profile are full of novel ideas about personal finance and investing.
Below are some key ideas I’ve learned from Nick and have benefited from.
How much to save
Nick has one of the simplest, most brilliant saving philosophies I’ve ever heard:
Save what you can!
Rather than getting bogged down by rigid savings goals, Nick emphasizes flexibility. From my own experience, I’ve found that this mindset reduces stress and allows you to adapt your savings based on your life circumstances. Consistency matters more than perfection.
Saving is important, but Nick also has some counterintuitive advice for those overly worried about their investment returns early on in their financial journeys.
Don’t fret about investment returns
Nick offers a brilliant contrast between saving and investing in the Saving is for the Poor, Investing is for the Rich blog post and his book. This doesn’t mean people with less money shouldn’t invest—it just highlights that early on, growing your savings matters more than your investment returns.
When your savings are small, investment returns don’t make much of a difference. For example, a 10% return on $10,000 is just $1,000, while a 2% return on $100,000 yields $2,000—double the former. So until you’ve built a significant savings balance, it’s better to focus your energy on increasing income rather than obsessing over optimizing investment returns.
I also saw him share this idea in his now-deleted tweet. I think that’s a brilliant insight. I’m not sure why he deleted that tweet.
Focus on income, not investments
Through the Paychecks, Not Portfolios: Why Income is the Key to Financial Success post, Nick encourages focusing on increasing your income before worrying about optimizing investment returns. No amount of portfolio management can outpace the returns of a well-paying job or side hustle.
Like the previous idea, this doesn’t mean you shouldn’t save or invest on a lower income. However, the main priority should be finding ways to boost your earnings.
This is one reason I don’t like investment courses. My challenge isn’t that I don’t know how to save or invest—it’s that I don’t know how to increase my earnings. And no course can teach that. The only people who make money through such courses are those who sell them!
Don’t fall into the FIRE pit
Nick’s recent post, My Favorite Investment Writing of 2024, introduced me to Jared Dillian’s critique of the FIRE movement, which I found thought-provoking. Jared’s post, in turn, led me to borrow and read his book No Worries, and I liked it!
Thanks for sharing these brilliant ideas, Nick. They’ve helped me rethink my personal finance journey, and I hope they inspire others to focus on what really matters: saving consistently, growing your income, and keeping things simple.
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