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My Brother-in-Law Thinks He’s Smarter Than Me

An Alternative Road Map to Financial Freedom 

Today’s post is a guest post from my brother-in-law Justin Twarog. Justin is a software engineer architecting and developing cloud software for a healthcare startup.  He came to realize the importance of financial well-being at a way younger age than I did. One of the nice unexpected benefits of my newfound financial literacy is being able to discuss these topics with him. He also has a financial plan.

I don’t agree with all aspects of his financial thinking as you will see. Regardless, I asked him to write this post to offer an alternative perspective. He will also introduce some concepts that I likely otherwise would not be able to bring to the Prudent Plastic Surgeon.

prudent plastic surgeon
Get ready, this is the only flattering picture of him on here

Why our 20’s Mean Everything

When I was 17 years old cleaning out my great grandmother’s house, I had a funny run in that sparked my financial intrigue. 

I opened an old freezer and found a stack of 20,000 crisp US dollar bills wrapped in tin foil. Carrying out a paper shredder in my great grandfather’s room, another $10,000 in envelopes came falling out. My great grandparents were from the Great Depression era. They were obviously protective of their money, their investments, and their financial freedom.

It’s no surprise then that my parents and grandparents always instilled in me the value of every dollar. They taught me how to live below your means and how to provide for your family.  I learned all of my work ethic and how I view money from my parents and I am forever grateful. 

I do not come from wealth, but I was taught the right lessons. By the time I was 20, I realized that I had the power to create wealth for me and my family. 

I’m glad that I had this epiphany when I did. I’ve experienced just how important it is to start strong and start early with personal finance. I believe for most of us, our 20’s are the key to setting our financial foundation. (Ed. – You can tell he’s really rubbing in the fact that I didn’t realize this until I was 32 and >$400,000 in debt.) This way, finances are not a stress, but rather something fun that we have control over. 

My Disclaimer

The strategies that I will outline below are ones that I personally use. They are not for everyone and this is not to be taken as financial advice by any means. 

It’s a glimpse into the strategy of a current 25 year old with a wife and 3 month old son becoming financially free through multiple avenues and strategies over the long term. Some of these avenues and strategies include speculative investments. (Ed. – I try to convince him out of these all the time – so far unsuccessfully.)

If there is a time for risk, I believe it’s in our 20’s or early in our investment careers. I do, however, not recommend high risk asset investing like stocks or long term and hold positions that are not as liquid without having an emergency fund of at least 3-6 months expenses. (Ed. – great advice)

Stock Market – Actively Trading Stocks 

My retirement section will outline a contrasting strategy, I keep a portion of my short term money actively trading with stocks. I research companies, follow the market everyday and look for potentially disruptive companies to invest my money directly. My portfolio is always changing, with core positions that likely won’t change for a long time. 

(Ed. – If you’ve read any of my blog, you know that I recommend sticking to broadly diversified, low cost index funds. You’ll see below that Justin believes in this too. He likes to take a small percentage of his portfolio and invest in individual stocks knowing there is more risk. If you’re going to pick individual stocks, I guess this is the way to do it.)


When I first started out buying stocks, I started with Exchange Traded Fund (ETFs) (Ed. – For the uninitiated, ETFs are basically mutual funds that trade on the market like individual stocks). I would transfer money to invest every single time I got a paycheck. Instead of looking forward to money hitting my checking account, I loved watching the money hit my brokerage account. 

My portfolio contained ~5 different Schwab ETFs and couldn’t wait to add more shares and reinvest my dividends. I was proud when my account reached 5,000, then 10,000 and so on. The biggest milestone for an individual trader in my opinion is the 25,000 mark. This lets you actively trade without being flagged as a pattern day trader (pattern day trading rule).

It is important to have milestones for our investment portfolio so we stay motivated to keep contributing. You will be surprised how much an account can grow just by having the discipline of moving money over on a consistent basis. 

Build a portfolio you are proud of 

It’s not fun when you open your account everyday and see positions you don’t find appealing anymore. This is why I spend a lot of time before pulling the trigger and really dive into research around an intriguing stock. 

My personal portfolio currently carries 5 stock positions.  It takes inspiration from the Oracle of Omaha’s current asset weight in the Berkshire Hathaway portfolio – 3 overweight positions followed by “flyers” or potential growth opportunities that are more risky.  

As I mentioned before, when I first started, I was buying ETF’s. Only after investing for roughly 3 years and following the market closely did I have the confidence to begin picking my individual stocks. It takes time, work and dedication to follow investing rules, setting guidelines for yourself and researching who you deem to be your winners. It becomes a lifestyle where, if you begin to slack, you could potentially miss out or make a costly mistake. (Ed. – Hence the benefit of investing in broad index funds for the long term which just requires rebalancing once or twice a year)

Always have an exit 

If a stock really is in trouble and signs are pointing to sell, sometimes it’s better to take your lumps and move on. It’s better to accept a -28% (840.00) loss with 3,000 cost basis then it is to take a potentially -50% (7,500.00) loss on a 15,000 position which is actually the entire portfolio after re-adding at various and oftentimes random price levels. This is dangerous and poor bankroll management.

You don’t want to be reckless with the resources that you are trying to grow. Buying a bankrupt company or a random penny stock because Reddit told you to is NOT a trading strategy. It is gambling.  

(Ed. – This is an important distinction between index funds and individual stocks. Index funds are designed to mirror the index that it follows, generally a broad market index. Index funds therefore generally rise over the long run. If they go to 0, that means the whole market has collapsed which is unlikely. Individual stocks, however, just represent that one company. Companies implode all the time. Their stock very well could go to zero. It’s much riskier.)

Alternative Markets – Cryptocurrency, Precious Metals and Collecting 

Buying and holding Silver and Gold for the long term 

I began buying and holding silver and gold as a hobby but also as a hedge. Precious Metals hold roughly a 7% weight of my portfolio and have much more value to me than numbers. It is meant to be an extreme long term hold investment (20+ years). However, it also acts as a pretty liquid emergency fund if needed. 

They also make great gifts. (Ed. – I should know, he has been generous enough to give some to both of his nephews.) Precious metals are also a hobby that has the potential to increase in value. Further, the low mintage coins can be a great to collect for their collection value. 

Managing risk exposure in digital currencies 

I was in crypto currency before the boom. Luckily, I did not lose anything during the bubble pop. I grew a small investment and multiplied my investment by 8 within 3 months. I then watched it all crawl back down to my initial investment before selling short and removing it from my portfolio. 

It was a valuable lesson for me and I’m grateful I did not lose money learning. At the very peak, I remember telling my wife how excited I was. She told me to sell. The lesson I learned is to always have an exit, trust your gut when a price gets silly and have the guts to sell and commit to it. (Ed. – This is why timing any market is impossible. If you’re going to do it, limit yourself and understand the risk.)

After evaluating and waiting to see opportunity in the market again, I re-entered with a small 3% of portfolio risk. It is currently going well and I will continue to monitor the position. The investment is a long term growth potential speculation asset and I am willing to lose the money initially invested for the upside potential. 

Value appreciating hobbies/Side hustles 

Growing our income through multiple sources is a great way to get extra cash to reinvest. There was a point in time when I sold clothes, bought and traded comic books/physical media on an Ebay store, and created websites etc. I did anything to get a little bit of extra income so I could have more cash for investments. It is often hard work for very little profit but the little wins add up over time.

There are also hobbies such as golden age comics, collectors Lego sets, or even fine wines that have grown and even outperformed the traditional stock market that could be clever ways to add to a financial portfolio. (Ed. – I’m a fan of side hustles too, gotta find my old Legos.)


Learn to live contributing 12% to an Employer Sponsored 401k 

If there is any core piece of my overall financial portfolio, it is my employer sponsored contributions. I have always contributed and treat the money as if it is non-existent to my income. (Ed. – This is called paying yourself first and is highly recommended.)

In modern times, most employers offer this and oftentimes offer a percentage match as well, which is free money. I choose to contribute 12%. Starting early and consistently contributing this amount allows me to not stress about my nest egg and to become almost a guaranteed millionaire at the most important phase in life. There are many calculators online to do the math for your own personal situation (income specifically) to see how contributing 12% (or even higher if possible) can help get you to your retirement goals. 

(Ed. – I completely agree with Justin here. Max out your contributions to tax advantaged retirement accounts, especially when an employer match is offered. I recommend a minimum overall savings rate of 20%, which is at least where Justin’s appears to be. My current rate is 41%, but I dug myself a much bigger hole than Justin.)

Max out your (Backdoor) Roth IRA 

This is a no brainer for people who meet the income requirements. Currently you can contribute $6000 per year to your personal IRAs and I chose the Roth due to the tax incentive. Your money is taxed going in and all gains time grow tax free. The strategy with the Roth IRA is to set it and forget it. Research many of the index funds out there that are low cost tracking the S&P 500 and buy for the long term. 

(Ed. – Ah, finally index funds. The Roth is the best option if you expect your tax rate to be higher in the future, then the money is taxed now at the lower rate and not later at the higher rate. If you are above the income limits, you can still contribute to a Roth IRA through the backdoor.)

Open a Rollover IRA for when inevitable company changes happen 

This isn’t a necessary component to a personal finance roadmap but I have noticed over the last 5 years that I am not happy with the performance of some funds through a company sponsored plan. Sometimes the investment options available to you are limited as well. In these cases, rolling over your sponsored accounts into a personal rollover IRA account will give you more control over your investments. Also, you will not have the complexity of managing potentially 5+ accounts over the years to track down your retirement savings if you think you may switch employers multiple times. 

Use a credit card through your Brokerage and get cash back deposited to your account 

This is a little trick I’ve been trying over the last 3 years. I opened a Schwab Investor credit card which allows me to get cash back on all purchases. I get 1.5% back with various deals happening all the time. The card links to your personal brokerage account and deposits the earnings every month.

Over the last 3 years after moving all possible expenses through the card, I average about $500 dollars of annual savings using this strategy which goes directly towards my Roth IRA contributions. To really master this strategy and not get into trouble, it is important to understand how to responsibly measure/manage your credit and cash flow and understand what your budget is, down to the dollar. 

(Ed. – This is a great idea. Justin also hits on a huge point that this is only a worthwhile strategy if you are paying off your credit card each month in total. Don’t collect credit card debt for points or cash back no matter how great the deal sounds. You will lose more money in interest payments than what they give back. Like Justin says, know your budget and only pay expenses through the card that you know you can completely pay off at the end of the month.)

In Closing

I feel it would be a disservice not to reiterate a point that this blog is all about:

“If a statue is ever erected to honor the person who has done the most for American investors, the hands down choice should be Jack Bogle.” 

– Warren Buffet

Time and again, it’s been shown that 80% of investors will not beat the market.  I have chosen to use my 20’s and personal risk appetite to pick my own stocks.  In all, while I have taken losses, total losses have amounted to 1% of my portfolio, heavily outweighed by the wins over time. 

I am careful, protective and cautious but if a beginner asked me what stock they should buy I would point them to an S&P 500 Index fund.  Index funds are a core piece of my portfolio and most likely if I do a follow up with the Prudent Plastic Surgeon in a year or two, I bet it will be an even larger core piece of my portfolio.  

I told him he could pick whatever photo he wanted for the post…and he selected this. Touché.

Learn & Discuss

If there is one key to success in any investment, it is to learn, discuss and invest yourself.  I love discussing investing strategies with Jordan and it often leads to discussions about life.  That’s ultimately why we invest, to better our lives for our family and ourselves.  I also have started a Slack channel with friends to discuss stocks and most recently Options Trading (another blog post).  It has become so much more to me than just moving money to an account, rather it’s become an obsession to be the best investor that I can be on a daily basis.

Discipline, Strategy and Commitment 

Playing lacrosse and football my entire life taught me valuable lessons that have transitioned to my investing career.   Painful defeats are the greatest teachers, discipline and work ethic will destroy talent that doesn’t have the same mindset, and ultimately the person you are competing against is yourself.  If you’ve made it this far through the post, I challenge you to challenge yourself and make a decision to change your financial future forever by taking control today.

There is one quote that we used for a lacrosse season (we always had team mottos on our practice shirts that represented that season) that the great Coach Stefan Henn has drilled into my head: “Wake early if you want another man’s land.” If there is anyone who can attest to how I have made this a part of my life down to the core, it’s my wife.  There are nights I am working until 4 AM and wake up at 6:30 AM ready to get after it, checking futures/pre-market trading, checking metals prices, and getting ready for another work day.  If there is something you want out of life, there is no time to wait.  Commit and go get it.  

Thank you to Jordan, The Prudent Plastic Surgeon, for letting me contribute to this great discussion. – JT

What do you think? Do you allocate a portion of your portfolio to riskier investments like cryptocurrency or individual stocks? Do you agree with Justin’s plan for financial freedom or no? Tell us what you think below!

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    Jordan Frey MD, a plastic surgeon in Buffalo, NY, is one of the fastest-growing physician finance bloggers in the world. See how he went from financially clueless to increasing his net worth by $1M in 1 year and how you can do the same! Feel free to send Jordan a message at [email protected].

    10 thoughts on “My Brother-in-Law Thinks He’s Smarter Than Me”

    1. dude your brother is nuts! I am usually up until 1-2am at night, then wake up 8am. I need my six hours of sleep! I am glad I do set it and forget it index fund investing. God bless him though he has a set investing plan that seems prudent and risks only a small portion of his portfolio. I myself can’t be bothered. Tell him I don’t need to wake early as I already have an investing plan to get another man’s land!

      • I tell him all the time. But that’s where he likes to take his risk. I like mine in real estate which I actually think is less risky and offers higher returns. Thanks for reading Rikki!

    2. Nice post! Word of caution on recommendation to open a Rollover IRA. Doing so may complicate ability to do future back door Roth IRAs as the pro rata rule will apply.

      If your new company has a decent 401k plan and allows transfers in from prior 401k, that may be a more prudent option.

      • Hey Jonezez, thanks for stopping by and for the great point! Definitely a limitation for high income earners who are planning on utilizing the backdoor as they should.

        My brother-in-law will be coming over in about 1 hour for my son’s birthday party and I will make sure I point that out to him!


    3. great post. live, learn, grow. For sure everyone needs to find their own path. Just copying someone elses strategy is just the beginning of the journey.

      starting early is awesome – in your 20s!!. starting late is essential (meaning, never too late to start investing – only failure is the ones who never get started at all!

      SP500 index, regularly investing, having a plan or strategy – all great advice from this blog post.

      Active stock trading (buying and selling frequently) – should be avoided for 99.99% of us. Only reason to actively trade is to learn/grow, but not in any hopes to make a lot of money. Actively BUYING stock in great companies- that’s not trading, but real investing!


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