Use for:

Portfolio optimization and asset allocation
Tax-advantaged account strategies
Retirement withdrawal mathematics
FIRE calculations and planning
Tax-loss harvesting analysis
Emergency fund sizing
Factor investing education

NOT for:

Tax preparation services (consult a CPA)
Specific securities recommendations for purchase
Guaranteed investment returns
Complex estate planning (consult estate attorney)
Replacing licensed fiduciary advisors

Core Competencies

Investment Theory

Modern Portfolio Theory: Efficient frontier, mean-variance optimization
Factor Investing: Fama-French factors, size/value/momentum premiums
Sequence of Returns Risk: Critical for retirement planning
Asset Allocation: Risk/return optimization

For mathematical implementations, see /references/investment-theory.md

Tax Optimization

Asset Location: What to hold where (taxable vs. tax-deferred vs. Roth)
Tax-Loss Harvesting: Systematic loss capture with wash sale avoidance
Roth Conversion Ladder: Early retirement access strategy
Tax Bracket Management: Filling brackets strategically

For strategies and code, see /references/tax-optimization.md

Withdrawal Mathematics

Trinity Study: Original and updated research
Dynamic Withdrawal Strategies: Guyton-Klinger, VPW, CAPE-based
Monte Carlo Simulation: Retirement success probability
FIRE Calculations: FI number, Coast FIRE, Barista FIRE

For simulations and calculations, see /references/withdrawal-math.md

Quick Reference

Safe Withdrawal Rates by CAPE

CAPE Range	Recommended SWR
Under 12	5.0%+ historically safe
12-18	4.0% historically safe
18-25	3.5% more prudent
Over 25	3.0-3.5% recommended

Factor Premiums (Historical)

Factor	Premium	Notes
Market	5-7%	Over risk-free
Size	2-3%	Small > Large
Value	3-5%	Cheap > Expensive
Momentum	4-6%	But volatile
Profitability	2-3%	Robust > Weak

FIRE Numbers

Standard FIRE: Annual Expenses × 25 (4% SWR)
Conservative FIRE: Annual Expenses × 33 (3% SWR)
Coast FIRE: FI_number / (1 + growth_rate)^years_to_retirement

Anti-Patterns

Optimizing for Taxes Over Returns

What it looks like: Making investment decisions purely for tax benefits. Why it's wrong: Tax tail wagging the investment dog; net returns matter. Instead: Optimize for after-tax returns, not just tax efficiency.

Ignoring Sequence of Returns Risk

What it looks like: Using average returns to plan retirement withdrawals. Why it's wrong: Order of returns matters enormously with withdrawals. Instead: Model sequence risk, use dynamic withdrawal strategies.

Complexity for Complexity's Sake

What it looks like: 15 different accounts, complex factor tilts, constant rebalancing. Why it's wrong: Complexity costs time, attention, and often money. Instead: Simple portfolios (3-fund) work for most people.

Anchoring to 4% Rule Without Context

What it looks like: "The Trinity Study says 4% is safe, so I'm done." Why it's wrong: Original study used 1926-1995 data; current valuations matter. Instead: Adjust SWR based on CAPE, time horizon, and flexibility.

Important Disclaimers

This is educational information, NOT personalized financial advice.

FOR PERSONALIZED ADVICE, CONSULT:
├── Fee-only fiduciary financial advisor
├── CPA for tax situations
├── Estate attorney for planning
└── Licensed insurance professional

TAX LAWS:
├── Change frequently
├── Vary by jurisdiction
├── Have exceptions and phase-outs
└── Require professional guidance for complex situations

INVESTMENTS:
├── Past performance ≠ future results
├── All investing involves risk
├── You can lose money
└── Academic research may not hold in future

Remember: Personal finance is personal. These frameworks provide guidance, but your specific situation, risk tolerance, and goals require individualized consideration.

personal-finance-coach

Personal Finance Coach

Integrations

Python Dependencies

When to Use This Skill