Personal Finance – J.D. Ignis

The recent $GME short squeeze and the associated frenzy of activity with novice investors shoveling their money into GameStop, AMC, BlackBerry, and other struggling businesses was a stark reminder of how important creating an investor policy statement is for retail investors.

An investor policy statement does not need to be complicated. In fact, I prefer the simple one-page version I now rely on because I can print it out and use it as a quick reference whenever I start to feel FOMO creeping up on me. Using this technique ultimately saved me from myself recently and I avoided buying $GME during the peak of the mania and getting left holding the bag when the inevitable sell-off happened. The controversial trading halts placed by multiple brokerage platforms on the hot meme stocks had no impact on me because I stayed out of it. This strategy also kept me out of trouble with the crypto bubble a couple of years ago. (Seriously, I had Coinbase ready to go before I deferred to my policy statement, which was written by my more rational self and decided to walk away.)

The Beginning of my FI Journey (and this blog)

If you are like me, and most of my peers in BigLaw, you graduated from law school with impressive credentials and fingers adorned with brass rings, which allowed you to land a coveted job at a large firm with a generous salary. Unfortunately, it is also likely that you graduated with an impressive amount of student loan debt too—over $145,000 on average. Add to that mountain of debt the common lifestyle inflation that occurs immediately after receiving an offer letter with a six-figure starting salary and, by the time you are a mid-level associate, it is easy to find yourself deeply in debt and approaching an uncertain inflexion point in your career. Even if equity partnership is in the cards, there is a very real possibility that a salary decrease is looming in the near future.

That essentially is where I found myself a couple of years ago. I remember distinctly the overwhelming sense of dread that came with every pay period and trying to juggle minimum credit card payments, car payments, normal expenses, and forking over cash to a contractor who had massively overrun the time and budget for our kitchen renovation. Luckily, the situation never got too dire. I never missed any payments or fell into bad standing with creditors. However, one evening, I realized that I had essentially no cash and no available credit left. I was terrified of not being able to weather even the smallest of financial storms and was frankly embarrassed that, as a highly educated person with a good job, I had found myself in that situation. That is when I finally decided to take action. I was going to stop lamenting my situation and actually do something.

Why you need an investor policy statement and how it can keep your investing life on track

Finding the FI Community and the Start of my Financial Independence Journey