1. Save first then spend
"Do not save what is left after spending; instead spend what is left after saving" - Warren Buffett. Approximately 50% of our income is taken out of our bi-weekly paychecks and put into 401k automatically before it gets into our bank accounts. This includes any bonuses we receive. While we do have decent incomes, the main reason we're able to save such a high percentage of our income is because we keep our expenses low. 


2. Time in the market
Buy low, sell high...sounds easy but it's NOT an investing strategy we use or recommend at all. Instead of "timing the market", we focus on "time in the market" as we plan to hold our investments for the long-term. As pointed out above, majority of our savings/investment are bi-weekly contributions into our 401(k) through payroll deductions. That means we are consistently dollar-cost averaging by putting money into the market regardless of market volatility. Slowly but surely, we are building our freedom fund.


3. Investment vehicles
​To get started with investing, you need to first figure out where to invest your money. We keep things fairly simple by using the 4 major investment vehicles available in the US:

• 401(k) - This is the easiest way to get started with investing because it is offered by most employers and the contributions are automatically withdrawn for your paycheck. 

• ​Individual retirement account (IRA) - This is another tax-advantaged account that individuals can set up at a financial institutions such as Fidelity, Vanguard, etc.
• Taxable accounts - Taxable accounts are most commonly referred as brokerage accounts, which allows you to invest your after-tax money.
• Health Savings Account (HSA) - This is a tax-efficient savings account available for people who are enrolled in a High-Deductible health insurance plan.​

​4. Asset Allocation
After figuring out where to invest your money, you'll then need to figure out what to invest in. I'll be honest, even though I'm the accountant in the house, this is not my area of interest or expertise. All I know is that we need to diversify our investments and not put all eggs in one basket. On the other hand, hubby enjoys investment stuffs so he handles the asset allocation of our investment portfolio. The following are the 3 main asset classes that we own:​​ ​​

• Stocks/equity - Stocks are usually considered risky investments but that's more so if you invest in individual company's stocks. All our stocks investments are in low cost total stock market index funds, which includes both domestic US and international companies. That means we are invested in every company within that index and it's a form of passive investing, which diversifies the risk because it fluctuates based on average stock price of many companies. 

• ​Bonds - These are lower risk, lower return investments. They help to smooth the ride when stocks becomes too volatile. Our bond investments include both government and corporate bonds.
• Real estate - While we do not actively invest in real estate, I do own a rental property in Malaysia which is generating enough income to cover the mortgage. As for our primary residence, even though we're not banking on any significant capital appreciation, it serves as a hedge against future inflation because our monthly housing cost is fixed and will be close to zero once we pay off the mortgage.