To save for your future self. To preserve your money against inflation. To replace your human capital with financial capital. We will review each of these ideas in turn and discuss why they are important for your personal finances.

All of these analyses illustrate the same thing—it doesn’t matter when you rebalance, just that you do it on some periodic basis. As a result, I recommend an annual rebalance for two reasons: It takes less time. It coincides with our annual tax season.

The most consistent way to get rich is to grow your income and invest in income-producing assets.

Though you can always earn more money, nothing can buy you more time.

For example, any competent basketball coach could tell you whether someone was skilled at shooting within the course of 10 minutes. Yes, it’s possible to get lucky and make a bunch of shots early on, but eventually they will trend towards their actual shooting percentage. The same is true in a technical field

Of course, there are circumstances where you would be better off if you sold immediately, but if you have the option, waiting as long as possible before selling or averaging out of your position will typically net you more money. In other words, buy quickly, but sell slowly.

The first tip is what I call The 2x Rule. The 2x Rule works like this: Anytime I want to splurge on something, I have to take the same amount of money and invest it as well.

As Jeremy Seigel stated in Stocks for the Long Run, “The real return on [U.S.] equities has averaged 6.8 percent per year over the last 204 years.”65

How Your Birth Year Affects Your Investment Returns You might think that something as random as the year you are born would have little impact on your ability to build wealth, but you’d be wrong. If you were to look throughout history, you’d see that equity markets tend to go through fits and starts that aren’t easy to predict. To illustrate this,