To manage your personal finances properly, you need only follow three rules: No. 1. Spend less than you earn. No. 2. Prioritize investing for your future. No. 3. Figure out what matters to you, then spend accordingly.

Investors who wish to TLH have to treat the mutual fund for what it is—a single security. They don’t get to look inside the portfolio and say, “Sell the bottom 10% of my holdings!” to book the losses. They only get to treat the fund as a, well, fund. That vehicle only lets investors access that average net gain or loss. Most of the internal losses

Consider traditional portfolios that hold a dozen mutual funds or ETFs. To harvest a loss, you sell the funds in the portfolio that are down for the year. You then replace them with a similar fund. The realized gains in the portfolio can then be offset (in part) by that loss. Done right, it can reduce capital gains tax costs in an average year by

With the exception of one or two years per century, bonds serve as a reliable, non-correlated counterweight to equities.

Bonds serve as an emotional relief valve, typically offsetting declining stocks. Owning bonds involves sacrificing some potential gains as equities rise in return for experiencing smaller drawdowns when they fall. This tradeoff was designed to prevent you from freaking out during the all-too-regular market spasms.

If this sounds a bit conventional, well, it might be, but think about it this way: The goal of life is not always to maximize your returns; sometimes, potential gains must be balanced against the possibility of losses. That’s why we need to occasionally consider minimizing regrets.

Doing this accomplishes several things: First, it locks in sufficient wealth to eliminate a lot of life’s money-related worries. Second, it still leaves you with plenty of upside if the best-case scenario turns out to come true. And third, it protects you from a lifelong regret in case of a dotcom-like collapse (I know, that’s impossible!).

It doesn’t have to be an all-or-nothing decision. The middle option is to sell enough—maybe 25% to 50%—to become rich in reality and not just on paper. Then, you can let the rest ride.

We have to accept the simple truth that a) we have no idea what either price will be in the future, and b) selling some can be a life-changing experience for you and your family.