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- 6 Ways to Use the Most Important Framework in Personal Finance, HSA Tips to Actually Build Wealth, Warren Buffett's "1-Word Secret" for Success, and More
6 Ways to Use the Most Important Framework in Personal Finance, HSA Tips to Actually Build Wealth, Warren Buffett's "1-Word Secret" for Success, and More
Benjamin Daniel, CFP®
May 24, 2025
Read Time: 4-minutes
Happy Saturday,
Here is this week’s edition of 6-Point Saturday — financial insights to help you make smarter money decisions.
Let’s get into it.
Point #1 — The Most Important Framework in Personal Finance—Explained
If you’ve studied active investing (trying to beat the market) in any way, you’ve probably come across the “Margin Of Safety” framework.
Popularized by Benjamin Graham in his seminal work, The Intelligent Investor, requiring a margin of safety in investing involves 2 steps:
Determine your estimate of a stock’s worth (often called “Intrinsic Value”)
Compare it to the price the stock is trading
Then, only buy when the stock price is significantly lower than your estimate of its value.
Why do investors require a margin of safety?
To protect against all of the uncertainties of the future.
The same idea applies to many aspects of personal finance. So, let’s explore these in the next Point…
Point #2 — 6 Ways to Use the Most Important Framework in Personal Finance
Beyond investing, requiring a margin of safety means building slack into the rest of your financial life. Creating buffers that protect you when things outside your control go sideways—or simply to ensure that you meet your financial goals.
Here are 6 examples of what that looks like:
A strong emergency fund (3 to 6 months of Fixed Expenses) so you don’t need to rely on credit cards when surprise expenses inevitably pop up
Living below your means so you can save & invest
Using conservative assumptions when planning for financial independence/retirement (so you don’t outlive your money)
Sufficient insurance to guard against unacceptable or catastrophic risks
Not maxing out what you “can afford” simply because that’s what a lender offers
Avoiding large positions in a single stock—diversification creates safety against market volatility
The best part?
Requiring a margin of safety in these areas gives you peace of mind. And that’s priceless.
Point #3 — Don’t Put This Off
Health Savings Accounts (HSAs) are one of the best wealth-building accounts available:
Tax-deductible contributions. Tax-deferred growth. Tax-free withdrawals when used on qualifying expenses.
The key?
Using them to actually grow your wealth and not just pay medical bills (4 steps on how to do this below).
Unfortunately, almost 90% of HSA participants aren’t investing their contributions (!).
A few tips on how to get it done:
“Tips to get it done: The name of the game is to invest your HSA in line with how you’re using it. If you’re tapping it for ongoing healthcare expenses and/or you need to maintain a minimum balance in the savings account, it’s wise to maintain a balance in the savings option even as you’re directing additional assets to the investment option. The good news is that many HSA providers have made it simpler to transfer assets from the savings account into long-term investments via monthly recurring transfers. (I set up my own recurring transfer as I was researching this article! I wasn’t aware that my HSA provider offered the option.)
In terms of what to invest in, use your proximity to spending from your HSA investment assets as a guide. While it might seem that your HSA should be your longest-term investment silo—the better to harness its prodigious tax benefits—bear in mind that HSAs tend to not be great assets for nonspouse beneficiaries to inherit. Thus, you and your spouse should prioritize spending HSA assets during your lifetimes. A balanced asset allocation—or even a bucket-type approach in line with your planned spending—makes sense.”
As promised, the 4 steps to make the most of an HSA:
Pay medical costs from cash flow (keep HSA funds growing tax-deferred because there is no time limit to reimburse yourself)
Set up a simple, digital system to save your receipts
Invest your contributions
Years later, withdraw tax-free to reimburse yourself
Tax-free contributions → Tax-free growth → Tax-free withdrawals
Point #4 — The Costs of Not Saying ‘No’ and How to Transform Negotiations
Whether it’s declining a pricey social event or a new project at work, or advocating for a pay raise or a salary negotiation, here is some negotiation advice from former FBI lead hostage negotiator Christopher Voss:
“Your reluctance to say ‘no’ costs you far more than the momentary discomfort of standing your ground. The fear of being labeled "difficult" is precisely what prevents others from seeing your true value. When you clearly articulate your boundaries, people don't withdraw—they begin to respect the parameters you've finally had the courage to establish. Your silence in moments of disagreement isn't preserving relationships; it's teaching others that your needs are negotiable.
The moment you start treating your time, energy, and expertise with the same reverence you automatically grant to others is the moment your negotiations transform. Advocating for yourself isn't about confrontation—it's about honoring the truth of who you are and what you bring to the table. This clarity ultimately serves everyone involved, creating negotiations built on authenticity rather than accommodation.”
Point #5 — Quotes of the Week
“The difference between successful people and really successful people is that really successful people say ‘No’ to almost everything.”
— Warren Buffett
— Investment Wisdom (@InvestingCanons)
8:02 PM • May 22, 2025
“Most failures are one-time costs.
Most regrets are recurring costs.
The pain of inaction stings longer than the pain of incorrect action.”
We tend to take every precaution to safeguard our material possessions because we know what they cost. But at the same time we neglect things which are much more precious because they don’t come with price tags attached: The real value of things like our eyesight or relationships or freedom can be hidden to us, because money is not changing hands.”
Point #6 — My Questions of the Week
What financial task did you recently complete that you could probably give yourself more credit for accomplishing?
What task are you currently putting off that would make the biggest impact on your finances?
Thanks for reading — I hope you found a helpful idea or two.
I’ll see you next Saturday with more.
Have a great weekend,
Benjamin Daniel, CFP®
Founder, Money Wisdom
P.S. If you’re ready to stop stressing about money and start feeling more in control, there are 2 ways I can help you:
Financial Health Check: Get your biggest money questions answered, understand where you stand financially, and get a personalized action plan from a CFP® professional. Book a free Intro Call here (or purchase today) to see if you’re a good fit.
Financial Coaching: If you’d like some accountability in getting your finances into shape, engage in financial coaching. Build the habits & systems to help you start building wealth, pay off debt, and feel confident about achieving your goals. Reply to this email and say “Coaching” to join the waitlist.
Disclaimer:
This material is not investment or tax advice. No responsibility for loss occasioned to any person or corporate body acting or refraining to act as a result of reading this material can be accepted by the publisher.
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