Minimalist Wealth

The Promise

After this chapter, you'll understand what minimalist wealth means, see real portfolio examples, and design a plan to simplify your finances and focus on what actually compounds.

What Minimalist Wealth Means

Most people think wealth means having more: more accounts, more investments, more properties, more stuff. But more creates complexity. Complexity creates stress. Stress creates mistakes.

Minimalist wealth means having fewer, better things. It's about concentration, not diversification for its own sake. It's about owning things that compound, not things that just look impressive.

Example: Tom had 12 different investment accounts, 5 credit cards, 3 properties, and 20 different stocks. He spent hours every month managing it all. He was "diversified," but he was also stressed and making mistakes.

Sarah had 2 accounts (checking and investment), 1 credit card, and 3 index funds. She spent 10 minutes per month checking her balances. She was "simple," but she was also calm and her investments performed better.

Minimalist wealth isn't about being poor. It's about being focused. It's about owning fewer things that matter more.

The 80/20 Portfolio

Apply the 80/20 principle to your finances:

• 80% in core holdings: Safe, boring investments that compound over time (index funds, real estate, your business)
• 20% in experiments: Risky bets that could pay off big (crypto, startups, side projects)

The core protects you. The experiments give you upside. Together, they create a portfolio that's both safe and has potential.

Example portfolio:

• 70% in index funds (VTSAX or similar)
• 10% in real estate (if you own a home)
• 10% in your business or side projects
• 10% in experiments (crypto, individual stocks, startups)

This is simple, focused, and has both safety and upside. You don't need 20 different investments. You need a few that work.

What to Keep, What to Cut

Keep if it:

• Produces cash (dividends, rent, business income)
• Builds a skill (education, tools, experiences)
• Increases peace (simplifies your life, reduces stress)

Cut if it:

• Demands constant attention but rarely pays
• Creates complexity without value
• Stresses you out more than it helps
• You can't explain why you own it

Example: Mike had 8 different subscriptions ($200/month total), 5 credit cards, and 15 different investment accounts. He cut it to 3 subscriptions ($50/month), 1 credit card, and 2 accounts. He saved $150/month and 5 hours per month. That's $1,800 and 60 hours per year—enough to invest or start a side project.

Real Portfolio Examples

Example 1: The Simple Investor

• Checking account: $5,000 emergency fund
• Investment account: $50,000 in VTSAX (total stock market index fund)
• That's it. Simple, effective, and it compounds.

Example 2: The Balanced Builder

• Checking: $10,000 emergency fund
• Investment: $40,000 in index funds
• Business: $20,000 in a side project that generates $2,000/month
• Experiments: $5,000 in crypto/startups

Example 3: The Real Estate Focus

• Checking: $15,000 emergency fund
• Real estate: $200,000 equity in rental property (generates $1,500/month)
• Investment: $30,000 in index funds
• Business: $10,000 in tools/equipment for consulting

All three are simple, focused, and designed to compound. None of them have 20 different accounts or investments. They're minimalist, but they're wealthy.

How to Simplify

If your finances are cluttered, here's how to simplify:

1. List everything: All accounts, investments, subscriptions, debts
2. Ask why: For each item, ask: "Why do I have this? Does it produce cash, build skills, or increase peace?"
3. Consolidate: Combine similar accounts. Close unused ones.
4. Cut: Cancel subscriptions you don't use. Close accounts you don't need.
5. Automate: Set up automatic transfers for savings and investments

Example cleanup:

• Closed 3 unused credit cards → Less to track
• Consolidated 5 investment accounts into 1 → Easier to manage
• Canceled 6 subscriptions → Saved $120/month
• Set up automatic investing → No more manual transfers

Result: 2 hours saved per month, $1,440 saved per year, and way less stress.

Owning for Peace

Minimalist wealth creates peace. When you have fewer things to manage, you have:

• Less stress (fewer decisions, fewer mistakes)
• More clarity (you know what you own and why)
• More time (less managing, more living)
• Better results (focus beats diversification)

Signs you're doing it right:

• You can explain your entire financial situation in 2 minutes
• You spend less than 1 hour per month managing finances
• You're not stressed about money
• Your investments are growing without constant attention

Wealth isn't about having more. It's about having enough, and having it simply. That's minimalist wealth.

From Idea to Action

This week, simplify your finances:

1. List everything: Write down all accounts, investments, subscriptions, and debts
2. Ask why: For each item, ask: "Does this produce cash, build skills, or increase peace?"
3. Cut one thing: Cancel one subscription, close one account, or consolidate two accounts
4. Automate one thing: Set up automatic savings or investing
5. Design your 80/20: What's your core (80%)? What are your experiments (20%)?

If you're starting from scratch:

• Open one checking account and one investment account
• Set up automatic transfer: $50-500/month to investment account
• Buy one index fund (VTSAX, VTI, or similar)
• That's it. Keep it simple.

If you're cleaning up:

• Close unused accounts
• Consolidate similar accounts
• Cancel unused subscriptions
• Automate everything you can

Remember: minimalist wealth isn't about having less money. It's about having less complexity. Start by cutting one thing. Build from there.