硅谷居士搬运号

"""
Backdoor Roth helped me save $3 million in taxes.

In the United States, families have two additional channels to contribute to retirement savings beyond regular contributions through employer-sponsored retirement accounts (such as 401(k), 403(b), 457(b), etc.).

The first is the Roth IRA (Individual Retirement Account). The basic idea of a Roth IRA is that as long as we have ordinary income, we can contribute after-tax funds to this account. In the future, the dividends and appreciation earned on these funds will be completely tax-free. Even stay-at-home spouses can open their own IRA accounts.

However, if your income exceeds the limits set by the IRS, you cannot contribute directly to a Roth IRA.

The good news is that we can achieve tax savings through the “Backdoor Roth IRA.” The steps are as follows:

1. Transfer funds from a bank account to a Traditional IRA account. By 2026, each person can contribute $7,500 per year.

2. Once the funds enter the Traditional IRA account, we immediately transfer this money to the Roth IRA account.

So, how much tax can we save by investing $7,500 in a Roth IRA compared to a regular taxable brokerage account?

Assuming we invest in an S&P 500 index fund in both scenarios, with an annual return rate of 10%, including a 2% dividend, and assuming our long-term capital gains tax rate is 15%. The investment period is 30 years.

Scenario 1: Funds deposited into a Roth IRA. After 30 years, the growth of this investment is:
$7,500 × 1.1^30 = $130,900.

Scenario 2: Funds deposited into a regular brokerage account. Since we need to pay 0.3% (=2% × 15%) in dividend taxes each year, the actual annual growth rate of the account is 9.7% (=10% - 0.3%). After 30 years, the growth of the account is:
$7,500 × 1.097^30 = $120,600.

In this case, the after-tax annual dividend is 1.7% of the total account amount (=2% - 0.3%). We reinvest these dividends into the fund, leading to a total accumulated dividend of:
$7,500 × 1.7% × (1 + 1.097 + ... + 1.097^29)
= $17,900.

When we withdraw the funds and pay capital gains taxes, the amount we will have is:
$120,600 - ($120,600 - $17,900 - $7,500) × 15%
= $106,300.

Therefore, the actual annual return rate is 9.2%, which is 0.8% lower than the Roth IRA account.

Thus, the additional wealth created by depositing $7,500 into a Roth IRA over 30 years is:
$130,900 - $106,300 = $24,600.

This $24,600 is 3.28 times our investment!

If your capital gains tax rate is higher than 15%, or if your state has a state tax, then the tax savings through the Roth IRA will be even more.

For example, if your state tax rate is 10%, the actual annual return obtained in a regular brokerage account will drop to 8.7%. The tax savings using the Roth IRA will be 5.27 times the principal.

Next is the Mega Backdoor Roth IRA.

In about 20% of employer-sponsored retirement accounts (such as 401(k)), employees can make after-tax contributions in addition to regular pre-tax contributions and Roth contributions, such as After-tax 401(k).

Taking 401(k) as an example, the mechanisms for 403(b) and 457(b) are similar.

The IRS has set a contribution limit for all categories of the entire 401(k) plan, which is:
Pre-tax 401(k) + Roth 401(k) + After-tax 401(k) + Employer contributions.

In 2026, this limit is $72,000.

If you have contributed $24,500 to a regular pre-tax 401(k) plan and your employer has contributed $12,250 (50% contribution rate), how much more can you contribute to After-tax 401(k)? The answer is:
$72,000 - $24,500 - $12,250 = $35,250.

If you have made after-tax 401(k) contributions, to save taxes, you must transfer these funds to Roth 401(k) or Roth IRA through the “Mega Backdoor Roth,” thereby permanently resolving the tax issue of these savings.

There are two ways to implement this backdoor:

1. In-plan Rollover: Some plans allow employees to automatically or manually convert after-tax 401(k) funds immediately into the plan's Roth 401(k).
2. In-service Distributions: Employees can also transfer these funds into their own Roth IRA accounts at any time.

Similar to the Roth IRA logic, if you contribute $35,250 to a Roth account through this backdoor this year, the tax savings over 30 years will be:
$35,250 × 3.28 = $115,600.

Our family started using these two backdoors early on to transfer a large amount of after-tax assets into Roth accounts. By estimation, by the time we retire, the tax savings alone will reach $3 million!

Have you started using Roth and Backdoor Roth yet? If not, please start as soon as possible!

If you would like to learn more about my investment and financial management experiences and insights, please visit Amazon or Google Play Books to purchase my Chinese financial book "Wealth Shortcut" or the English version "The Shortcut to Wealth: Your Simple Roadmap to Financial Independence."
"""

"""
How to save $3 million in taxes through the Backdoor Roth

In the United States, families can accumulate additional retirement savings in employer-sponsored retirement accounts (such as 401(k), 403(b), 457(b), etc.) through two additional methods besides regular contributions.

The first is the Roth IRA (Individual Retirement Account). The core idea of the Roth IRA is that as long as we have ordinary income, we can contribute after-tax funds to this account, and the future earnings and appreciation will be completely tax-free. Even full-time homemakers or home dads can open their own IRA accounts.

However, if your income exceeds the limits set by the Internal Revenue Service (IRS), you cannot contribute directly to a Roth IRA.

Fortunately, we can take advantage of the “Backdoor Roth IRA” tax-saving strategy. The specific steps are as follows:

1. First, transfer funds from your bank account to a Traditional IRA account. By 2026, each person can contribute $7,500 per year.

2. Once the funds are in the Traditional IRA account, immediately transfer them to a Roth IRA account.

So, how much tax can be saved by investing $7,500 in a Roth IRA compared to a regular taxable brokerage account?

Assuming in both cases, the investment is in an S&P 500 index fund with an annual return of 10%, of which 2% is dividends. At the same time, let's assume our long-term capital gains tax rate is 15%, and the investment period is 30 years.

Case 1: Investing the funds in a Roth IRA. After 30 years, the growth of this investment will be:
$7,500 × 1.1^30 = $130,900.

Case 2: Investing the funds in a regular brokerage account. Since you have to pay 0.3% (=2% × 15%) in dividend tax each year, the account's effective annual growth rate is 9.7% (=10% - 0.3%). After 30 years, the account's growth will be:
$7,500 × 1.097^30 = $120,600.

At this point, the annual after-tax dividends are 1.7% of the current account total (=2% - 0.3%). We reinvest these dividends into the fund, and the total accumulated dividends will be:
$7,500 × 1.7% × (1 + 1.097 + ... + 1.097^29) = $17,900.

When we withdraw the funds and pay the capital gains tax, the remaining amount will be:
$120,600 - ($120,600 - $17,900 - $7,500) × 15% = $106,300.

Thus, our actual annual return rate is only 9.2%, which is 0.8% lower than the Roth IRA account.

Therefore, depositing $7,500 into a Roth IRA can bring us additional wealth after 30 years:
$130,900 - $106,300 = $24,600.

This $24,600 is 3.28 times our investment amount!

If your capital gains tax rate is higher than 15%, or your state levies state tax, then the tax savings through the Roth IRA will be even greater.

For example, if your state tax rate is 10%, then your actual annual return rate in a regular brokerage account will be 8.7%. The tax savings using the Roth IRA will be 5.27 times the principal.

The second is the Mega Backdoor Roth IRA. In about 20% of employer-sponsored retirement accounts (like 401(k)), employees can not only make regular pre-tax contributions and Roth contributions but also make after-tax contributions, such as After-tax 401(k).

Here, we take 401(k) as an example; the mechanisms for 403(b) and 457(b) are similar.

The IRS has set limits on the various contributions to the entire 401(k) plan, namely:
Pre-tax 401(k) + Roth 401(k) + After-tax 401(k) + Employer contributions.

By 2026, this limit will be $72,000.

If you have already maxed out your regular pre-tax 401(k) with $24,500 and your employer contributed $12,250 (contribution rate 50%), then you can additionally contribute:
$72,000 - $24,500 - $12,250 = $35,250 to the after-tax 401(k).

To save on taxes, if you choose to convert the after-tax 401(k) to a Roth 401(k) or Roth IRA, the “Mega Backdoor Roth” can effectively resolve these tax issues for your savings!

There are two methods for this backdoor:

1. In-plan Rollover. Some plans allow employees to automatically or manually transfer after-tax 401(k) funds immediately into the plan's Roth 401(k).
2. In-service Distributions. Employees can also transfer these funds into their own Roth IRA accounts at any time.

Similar to the logic of the Roth IRA, if you deposit $35,250 into a Roth account through this backdoor this year, the tax savings over 30 years will be:
$35,250 × 3.28 = $115,600.

Our family started utilizing these two backdoors early on, transferring a significant amount of after-tax assets into Roth accounts. It is expected that by the time we retire, the tax savings will reach as high as $3 million!

Have you started using Roth and Backdoor Roth yet? If not, please take action as soon as possible!

If you want to learn more about my investment and financial management experiences and insights, please visit Amazon or Google Play Books to purchase my Chinese financial book "Wealth Shortcut" or the English version "The Shortcut to Wealth: Your Simple Roadmap to Financial Independence."
"""

"""
The backdoor Roth helped me save $3 million in taxes.

In American households, besides making regular contributions to employer-sponsored retirement accounts (like 401(k), 403(b), 457(b), etc.), there are two additional channels for retirement savings.

The first is the Roth IRA (Individual Retirement Account).

The core idea of a Roth IRA is that as long as we have ordinary income, we can contribute after-tax funds to this account. In the future, the dividends and appreciation generated by these funds will be completely tax-free. Even full-time homemakers and stay-at-home dads can open an individual IRA account.

However, if your income exceeds the limits set by the IRS, directly contributing to a Roth IRA will no longer be feasible.

Fortunately, we can achieve this through the tax-saving strategy known as the "backdoor Roth IRA." The specific steps are as follows:

1. Transfer funds from a bank account to a Traditional IRA account. By 2026, each person can contribute $7,500 per year.

2. Once the funds enter the Traditional IRA account, immediately transfer this amount to a Roth IRA account.

So, how much tax can the Roth IRA actually save us compared to investing this $7,500 in a regular taxable brokerage account?

Assuming in two different scenarios, we invest in the S&P 500 index fund with an annual return of 10%, of which 2% is dividends, and assuming our long-term capital gains tax rate is 15%. The investment period is 30 years.

Scenario one: Funds deposited into a Roth IRA. After 30 years, this investment grows to:
$7,500 × 1.1^30 = $130,900

Scenario two: Funds in a regular brokerage account. Since we need to pay 0.3% (=2% × 15%) in dividend taxes each year, the actual annual growth rate of the account is 9.7% (=10% - 0.3%). After 30 years, the account grows to:
$7,500 × 1.097^30 = $120,600

In this case, the after-tax dividend each year is 1.7% of the current account total (=2% - 0.3%). We reinvest these dividends into the fund, resulting in a total accumulated dividend of:
$7,500 × 1.7% × (1 + 1.097 + ... + 1.097^29) = $17,900

When we withdraw funds, after paying capital gains tax, we will receive:
$120,600 - ($120,600 - $17,900 - $7,500) × 15% = $106,300

Therefore, our actual annual return is only 9.2%, which is 0.8% lower than the Roth IRA account. Thus, depositing $7,500 into a Roth IRA brings us an additional wealth of:
$130,900 - $106,300 = $24,600

This $24,600 is 3.28 times our investment! If your capital gains tax rate exceeds 15%, or if your state has a state tax, then the tax savings through the Roth IRA will be even greater.

For example, if your state tax rate is 10%, then in a regular brokerage account, your actual annual return would drop to 8.7%. The tax savings using the Roth IRA would reach 5.27 times the principal.

The second is the Mega Backdoor Roth IRA.

In about 20% of employer-sponsored retirement accounts (like 401(k)), employees can make not only regular pre-tax contributions and Roth contributions but also after-tax contributions, such as After-tax 401(k).

The following uses 401(k) as an example, while the mechanisms for 403(b) and 457(b) are similar.

The IRS has set contribution limits for all categories of the 401(k) plan, which are:

Pre-tax 401(k) + Roth 401(k) + After-tax 401(k) + Employer contributions

By 2026, this limit is $72,000.

If you have already contributed the full $24,000 to a regular pre-tax 401(k), and your employer contributed $12,000 (with a contribution rate of 50%), how much more can you contribute to an after-tax 401(k)? The answer is:

$72,000 - $24,000 - $12,000 = $36,000

If you have made after-tax 401(k) contributions, to save on taxes, you must convert these funds to a Roth 401(k) or Roth IRA through the "Mega Backdoor Roth" to effectively resolve the tax issues of these savings.

There are two operational methods for this backdoor:

1. In-plan Rollover. Some plans allow employees to automatically or manually convert after-tax 401(k) funds to an in-plan Roth 401(k) immediately.
2. In-service Distributions. Employees can also transfer these funds to their own Roth IRA accounts at any time.

Similar to the logic of the Roth IRA, if you contribute $36,000 through this backdoor to a Roth account, the tax savings over 30 years will be:

$36,000 × 3.28 = $118,080

Our family started utilizing these two backdoors early on, transferring large amounts of after-tax assets into Roth accounts. It is expected that by the time we retire, the tax savings alone will reach as high as $3 million!

Have you started using Roth and backdoor Roth yet? If not, please take action as soon as possible!

If you want to learn more about my investment and financial management experiences and insights, please visit Amazon or Google Play Books to purchase my Chinese financial book "The Shortcut to Wealth" or the English version "The Shortcut to Wealth: Your Simple Roadmap to Financial Independence."
"""

Today, I successfully paid my first federal tax through https://t.co/UmJ0md9v1T.

With the start of the fourth quarter, my wife and I adjusted our W4 forms. This change resulted in our federal tax withholding showing as zero on our paychecks.

Today, I used my Bank Of America Unlimited Rewards credit card to pay several tens of thousands of dollars in estimated taxes to the IRS at https://t.co/UmJ0md9v1T.

The credit card cashback rate is 3.125%
The service fee for Pay1040 is 1.75%
The final net gain is 1.375%

This truly was an almost completely free lunch.

Today, I successfully paid my first federal tax payment through https://t.co/UmJ0md9v1T.

With the start of the fourth quarter, my wife and I made the corresponding adjustments to the W4 form, resulting in our federal tax on the paycheck becoming zero.

Today, I paid several tens of thousands of dollars in estimated taxes to the IRS using the Unlimited Rewards credit card from Bank Of America at https://t.co/UmJ0md9v1T.

The credit card cashback rate is: 3.125%
The fee for Pay1040 is: 1.75%
The net gain is: 1.375%

This can be said to be almost a completely free lunch.

Today, I successfully paid my first federal tax payment through https://t.co/UmJ0md9v1T.

With the arrival of the fourth quarter, my wife and I adjusted our W4 forms, so the federal tax shown on our paystub dropped to zero.

Today, I used the Unlimited Rewards credit card from Bank Of America to pay several tens of thousands of dollars in estimated taxes to the IRS at https://t.co/UmJ0md9v1T.

Cash back from the credit card: 3.125%
Service fee for Pay1040: 1.75%
Final net gain: 1.375%

This can almost be said to be a completely free lunch.

Today I completed my first federal tax payment through https://t.co/UmJ0md9v1T.

As the fourth quarter approaches, my wife and I adjusted our W4 forms to bring our federal tax withholding on our paychecks to zero.

Today, I paid several tens of thousands of dollars in estimated taxes to the IRS using BOA's Unlimited Rewards credit card at https://t.co/zEptGm8Hbb.

The credit card cash back rate is 3.125%, while the service fee for Pay1040 is 1.75%, resulting in a net gain of 1.375%.

This was truly an almost completely free lunch experience.

"""
Does the US stock market still have growth potential?

Today, I went with my family to Mount Hermon, located near the coastal city of Santa Cruz in southern Silicon Valley. There, we experienced an adventure park situated in a redwood forest, where we participated in ziplining and high ropes activities.

Previously, we had taken on high ropes challenges in the pine forests of Lake Tahoe. This time, we chose a two-hour zipline project, seizing the opportunity to appreciate the charm of the redwoods up close in the air.

Redwoods are a species unique to the west coast of the United States, with California hosting numerous national and local parks where redwoods thrive, creating spectacular scenery.

According to the instructor, some of the redwoods we saw today (see pictures 1 and 2) are over 1200 years old; they exceed 100 meters in height, equivalent to a 35-story building. In front of these giants, both in size and lifespan, we humans appear as insignificant as ants.

The longest-living redwood tree that currently exists is over 2200 years old, with its seeds germinating during the Western Han Dynasty in China!

As the ancient saying goes: In the mountains, there are thousand-year-old trees; in the world, it is hard to meet a person who lives to a hundred!

Since its establishment in 1792, the US stock market has a history of 233 years.

Today, a fan asked me: Will the US stock market continue to grow in the next decade?

I replied: A decade? A thousand years, ten thousand years, it will undoubtedly continue to grow!
"""

Home loans have generated $2.58 million in profits for me

Many families often harbor a dislike for debt, especially when faced with high-interest types of debt, such as credit card debt and student loans. This sentiment is understandable, as heavy debt burdens not only pose risks to a family's financial situation but can also negatively impact the mental health of family members.

However, I believe that under the right circumstances, some debt can be viewed as "good debt." For most average families, a reasonably priced home loan is a typical example of good debt.

First, effectively using a home loan allows us to leverage future income to purchase properties we desire. In the United States, about 75% of homebuyers choose to realize their homeownership dreams through mortgages.

Second, since home loans are a type of mortgage, they are typically one of the lowest interest rate debts available to average families. As long as we make timely repayments, banks will not force the sale of our property, even if the market value falls below the mortgage balance due to declining home prices.

This means we can extract the equity of our homes at very low rates to invest in high-yield products or for emergency expenditures, such as paying for college tuition or renovating our homes.

Over the past ten years, I have been extracting equity from my properties through cash-out refinancing and investing in index funds in the U.S. stock market. In fact, nearly 60% of refinancing is done through cash-out refinancing.

So, how much profit have I gained from my home loan?

Since 2015, I began using this strategy, extracting $400,000 from my primary residence to invest in the S&P 500 index fund and the information technology index fund VGT, and continued until I switched houses in 2021. The average interest rate at that time was about 2.5%.

During these six years, my interest cost was 15%, while the cumulative return on investment reached 110%. After deducting the interest cost, my net profit is:
$400,000 × (110% - 15%) = $380,000

This net profit of $380,000 has appreciated to $1.05 million over time.

In 2022, I once again applied this strategy, extracting $1.2 million from my new primary residence to invest in VGT, with an interest rate of 3.5%. By the end of 2025, my interest cost was 12%, while the cumulative investment return was 140%. Therefore, my net profit is:
$1.2 million × (140% - 12%) = $1.53 million

Thus, over the past ten years, the total wealth I have gained through my home loan amounts to:
$1.53 million + $1.05 million = $2.58 million

Looking ahead, I plan to continue leveraging home loans to further enhance the liquidity and yield of my family's assets.

How have you utilized home loans? Feel free to share your experiences!

If you wish to learn more about my investment and financial management experiences and insights, feel free to visit Amazon or Google Play Books to purchase my Chinese finance book "Wealth Shortcut," or the English version "The Shortcut to Wealth: Your Simple Roadmap to Financial Independence."

#HomeLoan #Investment #Finance #WealthGrowth

"""
The end of the year in Silicon Valley

Today is the last Sunday of 2025.

It is noon, and I am strolling through the residential area of the town.

Despite it being winter, the green grass in the town is still vibrant.

The trees in the residential area tower into the clouds, full of life.

A sense of tranquility and harmony fills the surroundings, with occasional sounds of children’s laughter coming from the park.

Wishing everyone a happy holiday!
"""

"""
More than four months have passed, and 'The Shortcut to Wealth' continues to be very popular in the market!

In February 2025, I released my financial book 'The Shortcut to Wealth' for free across the internet. This book compiles hundreds of financial articles I have published on my blog.

According to my estimates, the download count of this book has exceeded hundreds of thousands.

By mid-August 2025, based on reader feedback, I deeply optimized the structure and content of 'The Shortcut to Wealth', compressing the word count from 170,000 words to below 100,000 words and reducing the number of chapters by more than half. Subsequently, I officially published the book on Amazon and Google Play Books.

Additionally, I translated it into a Traditional Chinese version and an English version 'The Shortcut to Wealth'.

As of today, 'The Shortcut to Wealth' still ranks first on the Amazon Chinese eBook bestseller list, with a reader rating as high as 4.8, making it one of the highest-rated financial books on the internet.

In the investment category on Amazon, the book ranks second.

This once again proves the high recognition from global readers for this book!

I sincerely thank you again for your support and trust! I wish you even greater success on your investment journey!

If you have read this book, even the previous free version, I hope you can leave your valuable review on Amazon or Google, as this will help more readers discover this book! For this, I thank you in advance!

The link to the Simplified Chinese version '财富捷径' is as follows:
-- Amazon: https://t.co/PnRkz5q91L
-- Google: https://t.co/KuThis41ge

The link to the Traditional Chinese version '財富捷徑' is as follows:
-- Amazon: https://t.co/5BZBJpXv8p
-- Google: https://t.co/EKnOli43Uz

The link to the English version 'The Shortcut to Wealth' is as follows:
-- Amazon: https://t.co/E4WYKfDlI2
-- Google：
"""

"""
The stocks of American tech giants have performed the worst

In previous discussions, I expressed my views on employees in the tech industry holding company stock.

The biggest risk of employees holding company stock is risk, risk, and more risk. Once a business faces challenges, employees who hold a large amount of company stock will simultaneously face the triple risks of income decline, unemployment, and asset depreciation.

I also suggested that if you are interested in the tech sector, you might consider investing in the information technology sector index fund VGT, or heavily investing in tech companies through the Nasdaq 100 index funds QQQM and QQQ.

In fact, many tech company stocks have performed even worse than VGT. Those employees working in these companies who hold their own stock not only face the high risks of single stock investments but may also encounter poor investment returns. In other words, this is actually a lose-lose situation.

Next, we will list some tech giants with poor stock performance, illustrating through specific cases that holding one's own stock is not as ideal as people think.

I calculated the cumulative returns of these companies over the past five years, including dividends, with VGT's cumulative return rate of 123% as the benchmark.

Here are the tech giants that performed below VGT:

Company Cumulative Return
PayPal -75%
Adobe -30%
Intel -15%
Salesforce 19%
Qualcomm 29%
ServiceNow 37%
Amazon 46%
Netflix 83%
Cisco 102%
Apple 110%
Tesla 111%

If you had become an employee of PayPal, Intel, or Amazon five years ago and chose to hold company stock instead of investing in tech index funds, your losses would be quite severe!

In fact, even among the "FANG" stocks, three companies failed to exceed VGT's performance!

How much of your own company’s stock do you hold? When do you plan to sell?

If you wish to learn more about my investment experience and insights, please visit the Amazon website or Google Play Books to purchase my Chinese finance book "Shortcut to Wealth" or the English version "The Shortcut to Wealth: Your Simple Roadmap to Financial Independence."
"""

"""
The performance of American tech giants' stocks is poor.

In previous discussions, I expressed my opposition to employees of tech companies holding their own stocks.

The biggest concern with holding company stock is risk, risk, and more risk. If the company encounters difficulties, employees face a triple threat of income decline, unemployment, and asset devaluation.

I suggest that if you are optimistic about the tech industry, you might consider investing in the information technology sector index fund VGT, or in the heavily weighted tech companies of the Nasdaq 100 index funds QQQM and QQQ.

In fact, many large tech companies' stocks have performed even worse than VGT. Those who work for these companies and hold their stocks not only bear the high risk of single-stock investments but may also face poor investment returns. This actually constitutes a lose-lose situation.

Next, we will examine several tech companies whose stock performance has been poor, using specific examples to illustrate that holding your own company's stock is not as rosy as you might think.

I calculated the cumulative returns (including dividends) of each company over the past five years, using VGT as a benchmark, whose cumulative return rate is 123%.

Here is the list of tech companies performing below VGT:

Company Cumulative Return
PayPal -75%
Adobe -30%
Intel -15%
Salesforce 19%
Qualcomm 29%
ServiceNow 37%
Amazon 46%
Netflix 83%
Cisco 102%
Apple 110%
Tesla 111%

If you joined PayPal, Intel, or even Amazon five years ago and chose to retain company stock instead of investing in tech index funds, you could have suffered significant losses!

In fact, even among the "FANG" stocks, three companies performed worse than VGT!

Do you hold a large amount of your own company's stock? When do you plan to sell these stocks?

For more of my investment experiences and views, please visit the Amazon website or Google Play Books to purchase my Chinese investment book "Wealth Shortcut" or the English version "The Shortcut to Wealth: Your Simple Roadmap to Financial Independence."
"""

"""
The phenomenon of poor stock performance of American technology companies

In previous discussions, I expressed my views on employees of technology companies holding stocks of their own companies.

The biggest hidden danger of holding stocks in one's own company is risk. If the company encounters difficulties, employees holding a large number of stocks will face the triple risk of reduced income, unemployment, and asset depreciation.

I suggest that if you are optimistic about the technology industry, you might consider investing in the information technology sector index fund VGT, or heavily investing in the Nasdaq 100 index funds QQQM and QQQ.

In fact, many technology giants' stocks have performed even worse than VGT. Those who work in these companies and hold their own stocks not only bear the high risks of single stock investments but also suffer from poor investment returns. In a sense, this is a lose-lose situation.

Next, we will review several technology giants with poor stock performance, using specific cases to illustrate that holding stocks of one's own company is not as ideal as imagined.

For each stock, I calculated the cumulative return over the past five years including dividends, using VGT as a benchmark, which has a cumulative return of 123%.

Here is the list of technology companies that performed below VGT:

Company Cumulative Return
PayPal -75%
Adobe -30%
Intel -15%
Salesforce 19%
Qualcomm 29%
ServiceNow 37%
Amazon 46%
Netflix 83%
Cisco 102%
Apple 110%
Tesla 111%

If you were an employee who joined PayPal, Intel, or Amazon five years ago, if you chose to keep the company stock instead of investing in technology index funds, you would have suffered significant losses.

In fact, even among the “FANG” stocks, there are three companies that performed below VGT!

Do you own a large number of your own company’s stocks? When do you plan to sell?

If you want to learn more about my investment and financial management experience and insights, feel free to visit the Amazon website or Google Play Books to purchase my Chinese financial book "Wealth Shortcut" or the English version "The Shortcut to Wealth: Your Simple Roadmap to Financial Independence."
"""

Why did I choose to sell the shares of my own company?

In many tech companies, equity incentive mechanisms are widely adopted, with company stock being awarded annually to high-performing employees as part of their compensation.

During my 20-year career in Silicon Valley, I have always liquidated the company stock I received immediately and reinvested it into the index funds I favor.

So, why am I unwilling to hold the stock of my own company?

Firstly, the stock of my own company is an individual stock, and the risk associated with individual stocks is significantly higher than that of index stocks, which is obvious.

In other words, if your employer gives you a cash bonus worth $100,000 instead of an equivalent value in stock, would you choose to invest that entire bonus in your own company's stock? The vast majority of people probably wouldn't do that.

Secondly, many individuals have a home bias, mistakenly believing they know their own company very well and that the company will undoubtedly have a bright future.

In reality, many employees of neighboring companies share similar views. However, there are not many companies in the market that truly perform well, usually only a few to dozens. Therefore, not all tech company stocks are likely to outperform the market index. This preference among employees is more a result of subjective desire.

Even if your company is performing well currently, future performance is unpredictable. If you sell your stock when the company is on a downward trend, you might face substantial capital gains taxes.

Finally, holding your own company's stock carries additional risks.

Imagine if your company faces a severe crisis, with significant performance declines, a sharp drop in stock price, and even large-scale layoffs. At that point, you might encounter reduced bonuses, a significant drop in stock value, and even job loss, which would be a triple blow. This risk is far greater than the risk of holding index funds and exceeds that of other individual stocks.

For example, in 2000, the American energy giant Enron was the seventh-largest company in the United States and was named one of "America's Most Innovative Companies" by Fortune magazine for six consecutive years. The company allowed employees to hold company stock in their 401(k) retirement accounts, and almost all employees were confident about the company's future.

However, in 2001, Enron was revealed to have engaged in massive systematic accounting fraud, with its stock price plummeting from $90 to $0.30. The company declared bankruptcy in 2004, and several executives were prosecuted and imprisoned.

Many employees not only lost their jobs, but their years of accumulated retirement funds also disappeared.

For the reasons mentioned above, I believe that holding shares of your own company is a highly risky investment behavior.

If you have a strong interest in the tech sector, you might consider allocating or heavily investing in the Nasdaq 100 index fund or technology sector funds.

Do you hold shares of your own company? When do you plan to sell?

"""
How high are medical expenses for a family of five in the United States?

Recently, a friend asked me whether medical expenses in the United States are expensive. Today, I would like to briefly share our experiences.

First of all, like most American families who are not yet retired, my family’s health insurance is provided by my employer. Both my spouse and I have good health insurance through our respective workplaces that covers the entire family. After comparison, we found that the insurance offered by my employer is superior, so I chose to continue using this plan, while she no longer participates in her company’s insurance plan.

My employer offers various insurance options, allowing employees to choose based on their needs.

The most common choice is the HMO (Health Maintenance Organization) plan. The advantage of this plan is that its premiums, deductibles, and out-of-pocket expenses are relatively low. For the past few years, our family has been using this plan. All prenatal and postnatal expenses during my wife's third pregnancy, as well as the costs for the premature baby’s three-week stay in the ICU, were fully covered by the insurance company, and we did not incur any costs.

Since 2017, we noticed that the HDHP (High Deductible Health Plan) option offered by the company supports Health Savings Accounts (HSA), so we decided to switch our health insurance to this plan.

So, what are our family’s annual medical expenses?

In 2025, I chose the family plan. Regular check-ups for all five of us are completely free, and out-of-pocket expenses are only required for additional medical visits.

Since we chose the HDHP, typical medical expenses need to be paid 100% out-of-pocket until we reach the deductible limit. This year's deductible limit is $1600 per person and $3300 for the family.

After reaching the deductible, the insurance company will cover 90% of the additional costs, and the remaining portion must be paid out-of-pocket until the out-of-pocket maximum is reached. This year's out-of-pocket maximum is $3300 per person and $6600 for the family. All costs exceeding this limit, even $1000000, will be covered by the insurance company.

This year, our family’s total expenses include:
- Premiums: $4200 per year.
- Outpatient expenses: We visited doctors five times, including one visit to an urgent care center, totaling $2100.
- To encourage us to save in the HSA, the company gives me an additional $2000 each year.

Therefore, our total expenses are: 4200 + 2100 - 2000 = $4300.

It is worth noting that all the above expenses are pre-tax amounts. Therefore, our actual post-tax expenses are about $2200, averaging $440 per person.

In our family’s overall expenses, this proportion is less than 1%. Therefore, I have never viewed medical expenses as a burden.

Even if we reach the $6600 out-of-pocket maximum, the total expenses would only be:
4200 + 6600 - 2000 = $8800.

Converted to post-tax expenses, that would be about $4400, averaging $880 per person. This amount is still negligible.

What percentage of your family’s medical expenses is of your income? Everyone is welcome to share!
"""

How high is the historical return rate of the S&P 500?

In mainstream financial literature, it is generally believed that the annualized average return rate of the S&P 500 index, considering dividends, is about 10%.

However, many netizens have questioned this, arguing that this high return rate is only based on the performance of the past ten or twenty years and therefore lacks persuasiveness. Today, I will analyze this.

As we all know, the S&P 500 index has been established since 1957. So, how do we obtain the previous data? In fact, it is not complicated: the constituent companies of the S&P 500 are basically the 500 largest companies by market capitalization in the U.S. stock market. Therefore, we can trace back to the constituent companies of the index for each year and calculate the return rates for different periods.

In fact, professionals have long organized this data. Today, I will reference the S&P Index Calculator on the authoritative website DQYDJ to summarize the historical return rates of this index.

For each time period, I also summarized the average annualized return rates for both monthly investment and lump-sum investment, with the cutoff month being December 2025.

Over the 150 years since 1875, the return rate for regular investments is 8.5%; while the return rate for lump-sum investments is 8.1%. If you invested $1 in 1875, its value today would reach $125,000, an increase of 125,000 times!

In the past 100 years, the return rate for regular investments is 9.7%; the average annualized return rate for lump-sum investments is 9.2%.

Over the past 80 years, the return rate for regular investments is 10.0%; the average annualized return rate for lump-sum investments is also 10.0%.

In the last 50 years, the return rate for regular investments is 11.0%; while the average annualized return rate for lump-sum investments is 11.1%. If you invested $1 in 1975, it would be worth $190 today, an increase of 189 times, with a cumulative return rate as high as 18,900%.

In the past 40 years, the return rate for regular investments is 10.3%; the average annualized return rate for lump-sum investments is 10.8%.

In the past 30 years, the return rate for regular investments is 10.1%; while the average annualized return rate for lump-sum investments is 9.8%.

In the past 20 years, the return rate for regular investments is 12.8%; the average annualized return rate for lump-sum investments is 10.3%. If you invested $1 in 2005, its value today would reach $7.2, with a cumulative return rate of 610%.

In the past 10 years, the return rate for regular investments is 15.0%; the average annualized return rate for lump-sum investments is 13.0%.

And in the past 5 years, the return rate for regular investments is 16.3%; the average annualized return rate for lump-sum investments is 14.2%.

From the above historical data, it can be seen that the annualized return rate of the S&P 500 index over the past century is indeed close to 10%. In the past 50 years, the average annualized return rate of the S&P 500 has often exceeded 10%.

The historical data of over 150 years undoubtedly proves that the high return rate of the S&P 500 index is not a phenomenon that has only appeared in recent decades. In fact, it has always performed excellently; it is just that many people do not understand it well enough.

If you want to learn more about my investment experience and insights, feel free to visit Amazon or Google Play Books to purchase my Chinese finance book "财富捷径" or the English version "The Shortcut to Wealth: Your Simple Roadmap to Financial Independence."

My Xiaohongshu follower count has officially surpassed 200,000!

On December 1, 2024, I officially created my Xiaohongshu account and began sharing my financial notes.

In just under 10 months, by September 21, 2025, my follower count reached 100,000.

Not long after, on December 25, 2025, my total follower count broke through 200,000.

In the past three months and four days, my follower count doubled, increasing by a full 100,000, which is comparable to the growth over the previous nine months.

In the year and 24 days since starting my blog, I have published over 230 notes, receiving a total of 270,000 likes and collections.

Among them, the most popular note "2024 Financial Summary" reached 220,000 views, while another hot post "Domestic Nasdaq Positive Rankings" also garnered over 10,000 likes and collections.

These figures indicate that I have become one of the most popular financial bloggers on the Xiaohongshu platform.

Meanwhile, my follower count on the X platform has also exceeded 30,000!

Sincerely thank everyone for their support and recognition! Wishing everyone a happy holiday and prosperous financial luck!

In the United States, is having one million dollars in assets enough to achieve retirement?

In recent decades, the FIRE (Financial Independence, Retire Early) movement has gained widespread popularity among the younger generation worldwide.

People often ask: If you and your partner jointly have one million dollars in retirement savings, can you retire early?

First, according to the '4% withdrawal rule,' you can safely withdraw $40,000 from your retirement funds for living expenses.

If you have reached the age to receive government pensions, perhaps you can really consider retirement.

For example, suppose each person receives $20,000 in government pensions annually; your total annual income would reach $80,000, which is roughly equivalent to the average income level of American households.

However, if you are not yet able to receive government or employer pensions, then the $40,000 income may feel a bit tight.

If you and your partner each have a retirement account and have each accumulated $1,000,000, your total assets would reach $2,000,000. According to the 4% withdrawal rule, you would be able to withdraw $80,000 from the retirement accounts, which should be enough to support a basic retirement lifestyle.

Therefore, I believe that if an ordinary American can save $1,000,000 in their retirement accounts, then they are not far from the goal of financial freedom and early retirement.

So, how many years do you need to save $1,000,000?

Assume I invest Y dollars annually in an index fund (such as the S&P 500 index fund) with an annual return of R; after N years, my assets would be:
Y × ((1 + R)^N - 1) / R
According to the above formula, if the annual return R is 10%, the situations to save $1,000,000 are as follows:

- Save $1,390 annually (approximately $120 monthly), requiring 45 years.
- Save $3,690 annually (approximately $300 monthly), requiring 35 years.
- Save $10,204 annually (approximately $500 monthly), requiring 25 years.
- Save $17,543 annually (approximately $1,460 monthly), requiring 20 years.
- Save $31,000 annually (approximately $2,600 monthly), requiring only 15 years.
- Save $62,000 annually (approximately $5,200 monthly), requiring just 10 years.

In fact, over the past 20 years, the annualized return for investing in the S&P 500 index has reached 13.4%.

In the past 30 years, the annualized return for investing in this index has also remained above 10.7%.

Therefore, I believe that as long as one plans ahead and starts investing, many American families have the opportunity to become millionaires and achieve early retirement.

If you want to learn more about my investment and financial management experiences and insights, feel free to visit Amazon or Google Play Books to purchase my Chinese work "Wealth Shortcut" or the English version "The Shortcut to Wealth: Your Simple Roadmap to Financial Independence."

The hidden dangers of critical illness insurance, everyone must be vigilant!

Many domestic readers have asked me questions about critical illness insurance. Today, I will conduct an in-depth analysis of this topic.

First, which groups of people need to consider purchasing critical illness insurance?

If your employer does not provide sufficient medical insurance coverage, you may need to consider purchasing critical illness insurance. This type of insurance is designed to help you bear the costs when you or your family members unfortunately suffer from a serious illness and need to pay high medical expenses, thus avoiding financial difficulties for the family.

Therefore, the core purpose of critical illness insurance is to prevent low-probability major disease events. Daily small medical expenses generally do not require this type of insurance.

Next, which type of critical illness insurance should be chosen?

Currently, there are three main types of critical illness insurance on the market.

1. Consumption-type critical illness insurance
This insurance does not return the insured amount at maturity if no claims are made during the coverage period. This is the most economical and basic choice, and I only recommend this type. Similar to car insurance and homeowners insurance, consumption-type critical illness insurance is a pure consumer product, with low premiums and easy to understand. For example, a policy of 1 million yuan costs about 1,500 yuan per year.

2. Savings-type critical illness insurance
If the insured does not claim during the coverage period and passes away peacefully, the insurance company will pay the insured amount. However, if a claim has been made during the coverage period, no insured amount will be paid at the time of death.

3. Refund-type critical illness insurance
If no claims occur during the coverage period, the policy will return the premiums paid, the insured amount, or cash value upon maturity, with the specific return method depending on the contract agreement. Commonly referred to as “treating illness when sick, refunding when not sick.”

The structure of the latter two types of insurance is similar to whole life insurance, essentially combining insurance (consumption behavior) with savings and investments, usually targeting families that do not understand investment management well.

The main drawbacks of these two types of insurance include:

1. High premiums.
For example, the annual premium for a 1 million yuan refund-type critical illness insurance is as high as 6,700 yuan, which is 4.5 times that of consumption-type critical illness insurance!

2. Low investment returns.
After deducting various fees, the annualized investment return rate of this type of insurance is usually only around 3%.

3. Poor liquidity.
If family income changes and you cannot continue to pay premiums, or if the policyholder decides to terminate the contract early, you may lose up to 80% or more of your assets. Additionally, before the policyholder passes away, it is almost impossible to withdraw the accumulated funds in the policy.

Assuming a 30-year-old young person chooses a regular consumption-type critical illness insurance and invests the saved funds in an S&P 500 index fund. By the time he is 80 years old, the wealth in the fund account is expected to reach 6,050,000 yuan! This is a level of wealth that no savings-type or refund-type critical illness insurance can achieve.

Therefore, my suggestion is: if you do have a need to purchase critical illness insurance, it is best to choose consumption-type critical illness insurance.

Then, you can invest the excess funds in stock funds, such as the S&P 500 index fund. This not only improves the liquidity of family assets but also accelerates the appreciation of family assets.

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