Things to Consider When Purchasing Assets

Best Practices for Building Your Financial Independence Fund

(My book “Optimizing the 4% Rule” is available on Amazon now. It covers many aspects of designing and building a financial independence portfolio. Grab a copy if you are interested.)

My previous article “Optimizing the 4% Rule” discussed the types of indexes to construct your Financial Independence(FI) fund. When you are ready to purchase the assets, you will need to face a few decisions: How do you ensure that you have the right brokers and that you are investing in the right fund?

In this article, we will discuss some best practices and nitty-gritty details about the actual execution.

Choosing Investment Brokers

By 2023, we have heard stories about Robinhood, FTX, and Silicon Valley Bank.

• In early 2021, retail traders used the Robinhood app to buy large quantities of volatile meme stocks like GameStop and AMC Entertainment, driving up their prices in attempted short squeezes. This situation meant that Robinhood had to post significant collateral to remain solvent until those trades settled. Robinhood came close to defaulting during the GameStop short squeeze.
• In November 2022, due to mismanagement of funds, a lack of liquidity, and a high volume of withdrawals, FTX collapsed. This crash revealed an $8 billion shortfall in FTX’s accounts, leaving investors and customers…