Life Lessons Learned

How to pack light for travel?

Steve — Thu, 17 Mar 2022 02:56:16 GMT

Congratulations, you are off to a vacation. While you want to bring all the conveniences from home with you, you also don't want to your travels to be a week long weight-training session. My advice: travel light! Here is my life lesson learned.

Things I bring

It doesn't really matter where I go, my pack-list is pretty much the same. It boils down to whether I'm bringing my laptop (almost always), whether I need a nicer camera than my phone, which jacket(s) to wear (if any), and if I need additional activity-dependent gear (such as golf, swim, ski, etc).

While this is not one of those minimalist/ultralight packing list, I think it's close with a few additions or "luxuries". The motivation is the same: only bring things that are useful, will be used, and if possible: multi-functional. But I won't do anything overzealous like packing toothpaste in tin foil to reduce weight. Like putting together a wardrobe, choose with purpose.

Without further ado, here is my general pack-list:

EDC (Everyday Carry)
- Phone
- Card Case Wallet
- Keys
- Watch
Clothing
- Essentials: Roughly 1 set for every half week: so 1 set for a weekend, 2 sets for a week, 3 sets for anything longer
  - Long sleeve shirt
  - Short sleeve shirt
  - Boxer briefs
  - Socks
- Pants/shorts: 1 pair for under a week, 2 pairs for over a week
- (optional) Belt: I go beltless unless I need to tuck in my shirt, then I would use one with a plastic buckle
- One pair of shoes
- Additional layers: Depending on weather and destination
- (optional) Wrinkle-free dress shirt: Sometimes required for a fancy meal/show
- (nice to have) Sleepwear
Dopp Kit
- Toiletries
- Med Kit
- Toothbrush, toothpaste, floss
- Shaver
Useful items
- Water bottle: Zojirushi Stainless Steel Vacuum Insulated Mug keeps things hot or cold!
- Umbrella: Repel Travel Umbrella, nice and compact
- Sunglasses
- Earphones: I prefer wired because they work on planes and museum audio guides
- (optional) Headlamp: Smartphones have flashlights now, but have been glad to have it on multiple occasions. I would only bring it if you have one already.
Electronics
- Electronic Dopp Kit: Chargers and cables
- (optional) Laptop
- (optional) Camera
- (optional) E-Reader: I use Kobo which supports DRM-free ePub files
- (car) Car Kit: If I'm renting a car

My "best" gear

"Best" is subjective and situational. It depends on the criteria used for evaluation. Nevertheless, I will share what I enjoy using most as a reference guide.

Essential Clothing

While merino wool is natural and has better properties, I wear synthetics. I have sensitive skin, so merino wool still itches a little. But the deal breaker was that merino wool is not durable. Tiny holes cropped up pretty quickly.

Long sleeve: Patagonia Capilene Midweight Crew
Short sleeve: Rhone Reign Short Sleeve
I want to like the Patagonia Capilene 2s that I had, but they started itching. Loving the Reign line and their colors.
Pants: Outlier Slim Dungarees
Love the material. I wish there is more space in the calf area. This is design for cyclists, don't they have large calves?
Shorts: Outlier New Way Longs
Boxer Briefs: Saxx Quest
If it's good enough for Nat-Geo, it's good enough for me.
Socks: Darn Tough Tab No Show Light Cushion Socks
Shoes: Adidas Stan Smith Sneakers
White sneakers are so versatile. I wish there is a waterproof version.
(optional) Belt

Additional Layers

Mix and match for optimal warmth.

Summer
- Hoody: Patagonia Upslope Full-Zip Hoody
  The R1 material is a perfect balance of softness and warmth. Sadly, they discontinued this model. I think R1 TechFace Hoody is the closest match.
- Light Jacket: Fjallraven Field Jacket
  The fit and pockets are perfect. I wish this was waterproof. I applied wax to the G-1000 material, it mainly gets my backpack waxy too.
Spring/Fall
- Light fleece: Arc'teryx Arenite Hoody
  This is discontinued too! Why do they like to get rid of my favorite hoodies?
- Light down: Mountain Hardwear Ghost Whisperer Jacket
  This is such a versatile jacket. I can wear this anywhere from 5C-15C/40F-60F (probably fine for even colder weather). It's super light and packs down well. It's my go-to mid-layer and it pairs well with all my other jackets.
Winter
- Heavy down: Feathered Friends Hyperion Jacket
  Although FF market this as their lightweight jacket, it's 3.7oz fill weight is more than enough to keep me warm. I wear this below 5C/40F and it keeps me toasty. They don't make this anymore. I wish their EOS Jacket has a version without the hood.
Rain
- GORE-TEX! Arc'teryx Beta LT Jacket and Beta AR Pants
  I got the LT (light) version of the jacket because I had a SV (severe weather) jacket before. It was too stuffy for the tropics. I was wet regardless, either from rain or from sweat.

Sleepwear

Soft tee
Pajama pants or shorts
Slippers: You probably only need one pair, but I carry two: one for indoor, one for showers.

Toiletries

Body wash
Shampoo
Conditioner
Face Moisturizer (with SPF)
Body lotion
Lip balm
Nail clipper

Med Kit

This list should cover the most common aches and pains. In fact, this exact kit is good for keeping at home too.

Ibuprofen/Advil (pain reliever and fever reducer)
Guaifenesin/Mucinex (expectorant)
Dextromethorphan (cough suppressant)
Ciprofloxacin (antibiotic)
Certirizine/Zyrtec (anti-histamine)
Loperamide/Imodium (anti-diarrhea)
Gaviscon/Pepto (antacid)
(optional) Meclizine Hci/Dramamine (motion sickness)
(optional) Acetazolamide/Diamox (altitude sickness)
Antibiotic cream/Neosporin
Cortizone cream (anti-itch)
Bandaids
(optional) Moleskin or mole foam (useful if you are doing a lot of walking)
(optional) Alcohol wipes

Electronic Dopp Kit

This is much easier after USB-C. I only have two devices that uses Micro-USB: my point-and-shoot camera and e-reader.

USB-C Charger
6 ft USB-C cable
(international) Travel Adapter
(optional) USB-C to Micro USB adapter

Car Kit

The stuff from AUKEY works great.

Car Charger
Air Vent Phone Holder

Camera

I have a Sony α7 III and I strictly use the 24-105mm F4 lens when I travel. It's the perfect range.

For wildlife or outdoor adventure where carrying a bulky camera is a hassle, I recommend the Sony HX99 with 24-720mm zoom!

Other Considerations

Backpack

This is the most important yet very personal decision: the bag to put all this in. I use the Aer Duffle Pack 2 or the Arc'teryx Axios Pack. In both cases, I love the thought they put into the pockets and compartments.

Packing: Packing cubes vs compression sacks

Either is great for helping with organization and saving space. I use compression sacks because there are no zippers, so no point of failure. I use the Sea to Summit eVAC Dry Sack because the eVENT base makes it easier to push out air.

How to relieve lower back pains?

Steve — Tue, 09 Mar 2021 03:19:05 GMT

Uh oh, my lower back hurts. I've been doing those "bring knee to chest" stretches to no avail. What gives? Here's my life lesson learned.

I am not a medical professional. Below are stretches that worked for me and should not be interpreted as medical advice. More importantly, listen to your body. Stretching is uncomfortable, but it feels good. If it hurts, STOP. Don't injure yourself.

Root cause or symptoms?

Like any person that self diagnose with Dr. Google, I kept looking for stretches to alleviate lower back pains. Sadly, the stretches didn't help. I was also confused on what I was doing that injure my lower back frequently. But it turns out, I was looking for the wrong thing. Tight hips (from prolong sitting) can contribute to lower back pains as well!!

My 3 favorite stretches

So I started stretching before I go to bed. I actually stretch on my bed, eliminating the need for a mat on the floor. The whole thing only takes 6 mins, I hold each pose for 1 min per side. With these 3 stretches, I feel like I'm able to cover different areas of my hips. Now my lower back doesn't bother me.

Knee to Opposite Shoulder

This is number 4 on this list.

Figure 4 Stretch

This is the stretch that works BEST for me. If you are going to do one stretch, do this one. Here are some instructions. You could play around with the angles to get the best stretch.

Spinal Twist

This one is pretty relaxing and is suppose to decompress your spine. I like tucking my feet under the opposite knee for a better stretch.

Bent Over Hamstring

This is an oldie but a goodie. I can't seem to get a good stretch on my hamstring lying down, so I do this whenever I can the rest of the day. For me, I don't try to touch my toes, I would only end up rounding my back and lose the stretch. Instead, I keep a neutral/flat/straight back. This way, it stretches your hamstring. You can feel the difference. I could touch my toes if I round my back, but can only do 90 degrees if I keep my back straight.

Also, the downward-facing dog pose also does wonders for my hamstrings, but that position is more demanding.

Hope this helps and you will find yourself with a healthy back (and hips) soon!

How to put together a wardrobe?

Steve — Mon, 21 Sep 2020 02:57:16 GMT

Congrats on surviving ~~high school~~, ~~college~~, [insert phase of life here] without accumulating too many emotional scars. So let's try to survive the next phase in style! Or at least make sure you age better than those baggy jeans in high school. Here's my life lesson learned.

(Apparently, I am basically describing "capsule wardrobe". Thanks Emily for introducing me to the term/concept.)

How to shop (smart)

tl;dr;

buy things that fit you well (size and style)
buy it for life

Quality Over Quantity

You don't need a lot of clothes, what you need is a few versatile pieces. Once you have them, those few key pieces will give you many combinations.

I also have a prototypical view on things: this is what blah should look like. This helps me reduce the clutter. For example, I get the one watch that I think embodies what I think watches should be. It's the perfect watch for me. Since I won't get another watch, I don't mind spluring on this. When it breaks, I try to get the exact same one.

Timeless Over Trendy

You also don't want to replace your wardrobe because it was so ~~90s~~, ~~00s~~, [insert time period here]. In fact, fashion recycles things all the time, and some things never go out of style. Think aviator sunglasses, trench coats, topcoats, oxford shoes, etc. These are the things you could splurge on because you know you will wear them for years if you take good care of them.

Few Over Deals

I used to go to outlets because they have good deals. Now I rarely go because the things I like typically don't go on sale (they are timeless and they can always sell them next year at full price). It's only a deal if you use it, otherwise it's discounted garbage. Conversely, if I'm willing to pay full price, and I wait a month and I still want it, now I know for sure it's something I'll keep for a long time. Instead, now I look for discounts and sale events to buy the few items that I really want, not the other way around. Shop with purpose.

The Essentials

You wear these essentials daily. Make sure you have enough to last you until the next laundry day. Since I do laundry weekly, I have at least 8.

(Under) Shirts

A gray t-shirt is my staple. You could go with white or black too. These go with EVERYTHING. I'm personally a crew neck guy, a more classic option. But v-necks are cool too as long as they are not too deep.

As for material, I go with micro modal, which emulates the softness of silk among other benefits. It's touted as an eco-friendly fabric, but I've also read that they used too much water and trees. *shrug*, use your own judgement.

Underwear

I went from tighty-whities (briefs) as a kid, to boxers as a teenager, and finally arrived at boxer-briefs. They really are the best of both worlds. Again, buy micromodal. Go nuts on colors if you like. I used to get the SAXX Platinums, but now go with David Archy because it's a lot more economical. The material would pill after 12-18 months anyway.

For traveling, I used to get merino wool because wool is naturally antibacterial. However, they are not as durable as synthetics and they start developing holes. Now I get the SAXX Quest, named "the ultimate travel underwear" by National Geographic.

Socks

I buy multiple pairs of the exact same socks. This way, I don't need to sort them when folding laundry. 4 pairs in white, 4 pairs in black. Splurge on wool, they wick moisture a lot better, and are more durable. I get the Darn Tough socks, which has a lifetime warranty. But I buy socks every 3 years or so during holidays because I want them to stay in business.

The Staples

These are the staple pieces in your wardrobe. They are super versatile, and are meant to mix and match with each other really well. Imagine the combinations: everything in your closet goes well with everything!

Jeans

This is easy, get one in indigo (dark blue). If you want a second pair, get black. I am particularly fond of Japanese selvedge denim. A pair of good ol' American Levi's is also hard to beat.

Dress Shirts

If you ever visit Asia, you can find tailors that can turn around made-to-measure shirts around 3-5 days for the same price as off-the-rack shirts in the US. Look in styleforum.net for recommendations.

If not, find a brand that fits you well and stick with them. Get them tailored if needed, but then it gets kind of pricey...

Start with two solids: white and light blue. They go with everything and I consider them must haves. Then expand into other patterns. I have around 6 shirts, but had more when I had to wear them to work everyday.

Graphic Tees

I have a few of these, less than 6. They are cheap and fun. Although I end up wearing the essential gray tees a lot.

Knits

Have 2-4 sweaters. You could find affordable cashmere sweaters nowadays. I like the ones at Italic a lot, but they require a membership now (dumb). I am also surprised to find the Uniqlo ones to be softer than the Everlane ones.

I am also a big fan of the Patagonia Midweight Capilene shirts. I get them in gray, so they don't look like camping clothes.

Suits

The most important thing is: your suit needs to fit. Again, find a tailor in Asia if you can. If not, make sure you have your suit tailored. Tailors can't work wonders, they mostly can take in the sides and length of sleeves/inseam. Make sure a off-the-rack suit fits your shoulders. Otherwise it's unsalvageable.

I'm going to save you some time and tell you what style of suit to get: single-breasted, 2 buttons, in navy blue. Charcoal gray is also acceptable. Black is a distant third, unless you work as a waiter or at a funeral parlor.

The color of your suit also must match the color of your shoes. Now you can see why navy blue and charcoal grey are your go-to colors; they are so versatile. Black suits only goes with black shoes.

Jackets

Most (if not all) timeless men's jackets are inspired from the military: trench coats, top coats, pea coats, bomber jacket, field jacket, parkas, just to name a few. So start with those.

I like to have 5:

Casual Fall/Spring: Field Jacket
Dressy Fall/Spring: Trench Coat
Casual Winter: Duffel Coat
Dressy Winter: Top Coat
Leather Jacket

Feel free to splurge on these, these can last you a decade.

Shoes

You need at least 3 pairs; a fourth if you live somewhere cold:

Dress shoes (Cap-toe or whole cut oxfords. Black if you didn't listen and got a black suit. Otherwise you can have your pick in color.)
Casual shoes (Spoiler alert: white sneakers go with everything. There's a reason why you see Adidas Stan Smiths or Superstars everywhere.)
Sneakers (I'm a huge fan of the Nike Free RN Flyknits even though everyone is crazy for Ultraboosts. The Flyknits are soooooo light!)
Snow boots (My pair of Vasque hiking boots doubles as snow boots.)

You can also splurge on dress shoes. Add some Vibram rubber heel and half sole to protect the leather soles, and shine your shoes regularly. Leather, like your skin, needs moisturizers. They will last you a long time if you take good care of them.

How to gain weight and strength (for skinny guys)?

Steve — Sat, 15 Jun 2019 14:36:18 GMT

Congrats on winning the genetics lottery. It seems like you could eat all you want without gaining any weight. But you need some meat on your bones. So what can you do? Here's my life lesson learned.

Advice from Captain Obvious: Eat more, show up, work hard

These may sound like clichés, but they are direct and to the point. But this blog is not about what, but how. My approach focuses on macro and commitment. I do not focus on most efficient/effective, because those approaches tend to be much harder for you to commit to. Sure, you could follow the Chris Hemsworth workout and look like Thor. But will you be able to work out until your arms fall off for 6 days a week for the rest of your life? People that try to lose weight don't have problem losing it, they have problem keeping it off. When the diet plan they adopt is too restrictive, they can't resist the temptation for the rest of their lives. So instead of jumping off a cliff, focus on steps that you can commit to. These steps can still be large steps, but be realistic of what you can keep doing, there's no magic shortcut. Remember, you can always do more afterwards. You are more likely to sustain a gradual habitual lifestyle change than an abrupt one.

Gaining weight

It's straight forward to gain weight: eat more calaries. There are a lot of health guides telling you what to cook and eat. But to me, that's too complicated. So here's what I did:

My goal was to eat a minimum of 1000 calories surplus per day.

I kept my lunch and dinner plans identical. Changing this would have been annoying (which means hard to commit)
I want something brainless (easier to commit), milk and eggs were my answer
I eat 2 eggs (200kcal) and 16oz of milk (300kcal) for breakfast
I drink 2-3 glasses of milk after dinner before I sleep (600-900 kcal)

I gained 25 lbs in 5 months doing this. The key is find something that you can do and commit. A method could be very effective, but if you can't sustain it, it won't work.

At the moment, I want to gain slightly more weight. So I drink an extra 2 soylents (400kcal each): one after lunch, one after I leave work. Boom, that's 800kcal surplus a day.

Technically, you could do the opposite to lose weight.

Gaining strength

tl;dr: There is no shortcut.

It's very easy to fall into the trap of believing there is this magic workout program/routine and look amazing. What they don't tell you about "6 min abs workout" is that they need to be extremely intense and you need to do them as long as you want to maintain them. So again, can you commit to these habits?

Show Up

Personally, I avoid 4 day or 6 day programs because there's no way I have the time to maintain that. If you do, then go for it. Committing to showing up consistently is half the battle (or 80% or 90% depending who you ask or quote).

Work Hard

Once you get there, work!

“A well built physique is a status symbol. It reflects you worked hard for it, no money can buy it. You cannot borrow it, you cannot inherit it, you cannot steal it. You cannot hold onto it without constant work. It shows discipline, it shows self respect, it shows patience, work ethic and passion. That is why I do what I do.” ― Arnold Schwarzenegger

There is an endless amount of literature and bro-science online advocating the best and quickest way to get buff. If you have been paying attention, I don't read too much into that noise. For me, it's challenge yourself without getting hurt. It's imperative for you to push yourself to make gains. But it's equally important that you don't get hurt because your recovery will set you back a significant amount of time (rest and then building up back to your normal weights). The rest don't matter as much as you think.

What's the optimal number of reps? You can find a lot of bro-science and actual science that advocate for various reps. Ultimately, they fall within a certain range: around 5-12. I don't worry about the "optimal" number, I worry about doing the reps. I mix them up from time to time (see periodization).

What's the optimal program? It depends on you. If you need a starting point, Starting Strength and its variant 5x5 is very popular for beginners. Find something that you could commit to. I stop doing squats and deadlifts because I don't want to pull my back (it happened twice over 5 years, but that's still 2 times too many). My current routine is a 2-day a week push-pull variant.

My journey so far

So these are the before and after photos at 3.5 years. I gained 25 lbs over the first 5 months, follow by two sprints to gain 5 lbs each. Other than that, my weight doesn't fluxuate much.

How to prepare for your eventual death?

Steve — Mon, 04 Mar 2019 02:17:03 GMT

Congrats on still being alive! Living is great. Unfortunately, death is certain. Death is never easy, but we could make it easier by organizing the mess that your family and love ones will inherit. Here's my life lesson learned.

I am not a ~~licensed financial advisor~~ lawyer. I will include citations to the concepts that support my assertions.

Also, this post is dedicated to my friend Jarrod. He recently became a father, so this sort of stuff keeps him up at night.

Who gets your stuff?

I'm not an expert in this area and only have a general understanding. First you get to decide, and you need to write it down in the form of a will. If you don't have a will, then it goes your next of kin depending on your situation and your state's laws.

Next, assuming the above is settled, your estate (people responsible for your stuff after you die) can access your stuff as long as they can proof:

you are dead (with a death certificate)
they have the right to access it (with a letter of testamentary or letter of administration.

They don't need your username or password. With those letters, they are practically walking into a bank as you if you did with your ID.

Make 3 lists

Just because your estate gets your stuff, doesn't mean they know where you keep your stuff. So I gave my mom a print out of 3 lists:

Assets
Key Contacts
Liabilities

Assets

I only list the name of the companies and account numbers, which is sufficient.

financial accounts
- checking and savings
- investments (stocks, retirement, etc)
life insurance policy (remind them to keep paying the premiums in case you are incapacitated)
mortgage (pay your mortgage or your house will be re-possessed)

I don't sweat the small stuff. A safe deposit box with a Honus Wagner rookie card? Add it to the list! A storage locker full of stuff that no one else cares about, probably not.

Also anything that's of sentimental value too.

Key Contacts

Y'all probably have FB, so that's taken care off. But for me, I keep a list of key friends and colleagues that could spread the news for me. And of course, your current manager at work so they don't fire you for not showing up. Potential perk: your company might have a life insurance policy on your behalf included with your compensation package.

Liabilities

What Happens to Your Debts After You Die? Your estate need to pay off what you owe before they get the rest. It also depends on what type of loans, or whether there is a co-borrower. Since I'll be dead, I'll let them take care of it. But since we are a nice people, we would leave them a list of stuff so they know where to start:

loans
- mortgage
- car
- student
- credit card (so they don't keep charging you interest)
subscriptions (things with re-ocurring bills), so they could cancel the service pre-emptively. otherwise they'll just tack on all sorts of stupid fees.

Remember, debts don't transfer. If there isn’t enough to cover your debts, creditors generally are out of luck. Once YOUR money runs out, they don't have to pay. Don't let them scare your estate into paying with THEIR money.

Last words?

Try not to die.

How to shine shoes?

Steve — Sat, 02 Mar 2019 23:27:49 GMT

Congrats on getting a pair of shoes worth shining. Take good care of them, and they will last you a long time. But where do we start? Here's my life lesson learned.

Assembling a kit

I only use Saphir, but other brands are fine too.

Shoe Shine Brush (horsehair bristles)
I have a different brush and sponge for each shoe color, so they don't mix.
Polishing cloth
I actually got mine from Edward Green, but they don't seem to sell it online (anymore?).
Saphir Renovateur (Cleaner/Conditioner)
Saphir Pommadier Cream Shoe Polish
Saphir Pate de Luxe Wax Shoe Polish
Small sponge cubes (you could replace sponges with small dauber brushes if you like)

Instructions

Spoiler Alert: there is a lot of brushing

Remove laces
Brush shoe to remove debris
Use sponge to apply cleaner and conditioner
Wait for to them dry then brush
Use sponge to apply shoe polish, which restores pigment. Don't worry, it's not that strong.
Wait for to them dry then brush again
Use cloth to apply wax, which protects the shoe. The trick is to dab the cloth on wax, then use your finger to dab droplets of water onto shoe, and then apply wax in circular motion. The rubbing/friction produces heat, which enhances the shine.
Wait for to them dry then brush some more
???
Profit?

A video is worth a million words?

Here are some videos that will help reinforce the steps.

I was very fortunate to meet Lauren Faulkner, master polisher at Edward Green. EG was hosting a trunk shoe at Leffot, and she was there to demonstrate proper shoe shining techniques. I was the only one that showed up for the midday session, so I basically had a 1-on-1 lesson. She said she uses sponges to apply the cleaner and cream because it's easier for her. I also ask her why I can't get as good of a shine with a cotton cloth. She gave me a polishing cloth and I have been using it ever since.

The John Lobb video below most resembles the session I had with Lauren.

John Lobb

Leffot

The Shoe Snob

This guy has a pretty cool set up

How to allocate your retirement fund/401k?

Steve — Sat, 02 Mar 2019 23:14:28 GMT

Congrats on joining the work force. Your chair might not be warm, but it's already time to plan how to get out of work, your retirement. The choices can be overwhelming. Here's my life lesson learned.

I am not a licensed financial advisor. I will include citations to the concepts that support my assertions.

Untrained: One Click Retirement
Beginner: 4 Fund Portfolio
Intermediate: Tuning stock allocations
Advanced: Other diversifications
Elite
Parting Words: Index Funds or Bust

Untrained: One Click Retirement

Here's the cheat code: Target Retirement Funds.

You pick the year your expect to retire. The fund takes care of the rest for you. Done. Pat yourself on the back. Go take a nap.

Beginner: 4 Fund Portfolio

Spoiler alert: invest in 4 funds.

US Stocks
US Bonds
International Stocks
International Bonds

In fact, this is how the Vanguard Target Retirement funds are allocated.

3 basic investment concepts

But what if I want to try this myself? So how does target retirement funds work? Simply put, they diversify and allocate your investments based on your risk profile (how long until you retire).

Risk tolerance and time to retirement

Investment is about risk/rewards. While the US economy and stock market trends upward over time, there are many peak and valleys, highs and lows, some very steep. The more time you have, the more chances you have to recover from losses (if any), allowing you to be more aggressive and take more risk. Conversely, if you are about to clock out for good, it's prudent to protect your gains: take less risk, and invest on assets that may have less returns but are more safe.

Diversification and investment types

Now that we know that time horizon allows the amount of risk you should take, we need to figure out diversification (where) and allocation (how much). Diversification is a fancy word for "not having all your eggs in one basket". If one egg does bad, we might have other eggs that are doing well to offset it. Allocation is how much to put into each "egg".

If we were to over-simply the investment vehicles available, there are two traditional types: Stocks and Bonds. Stocks have higher returns and higher risk; bonds have lower returns and lower risk.

Allocation and efficient frontier

Now that we know we have to pick between stocks and bonds, how much do I put? If I'm risk-averse, does it mean I go "all-in" on bonds? The short answer is a resounding no. The reason behind this is the efficient frontier:

More like 2.5 minutes. The last 40 seconds is marketing material. But the explanation is excellent.

Stock vs Bonds

As demonstrated by the efficient frontier curve, we should have a combination of stocks and bonds, but how much? Traditionally, it's often recommended to have "Own Your Age In Bonds (OYAIB)". It's a simple rule championed by Vanguard founder Jack Bogle. If you are 25, put 25% of your portfolio in bonds. Or if you are 40, put 40% of your age in bonds. Some people find this too conservative. There are variations where they subtract 10 or 20 from your age. Others observed that the human life span is increasing, and hence we should use 15/50 Stock rule instead. The key take away is, have some bonds now, and have more bonds as you age.

Player 3 and 4 have joined the game: International stocks/bonds

As we already learned, diversification is beneficial. Experts explain whether foreign stock investments are a smart financial move. But again, how much? Popular answers range from 50% to zero.

My personal allocation

Again, I am not a financial advisor. This is not meant as financial advice. It is a frame of reference on what I do personally. I consider myself very risk-tolerant.

70% in US Stock
20% in International Stock
5% in US Bonds
5% in International Bonds

Intermediate: Tuning stock allocations

Now that you have your portfolio allocation locked down. You might be ready tinker some more. US stocks is a very board term. You might ask, what types of US stocks are there?

In this corner: Market Capitalization

Market capitalization is total worth of a public company, taking their number of outstanding shares and mulitplying by their current stock price. Companies are classified into Large, Mid, and Small caps:

Large-caps: companies with market cap over $10 billion (a.k.a. blue chips)
Mid-caps: companies with market cap between $2 and $10 billion
Small-caps: companies with market cap between $2 billion

The risk profile of the company is also implied by these market valuations. Large caps are viewed as mature companies and have the war-chest to weather a recession. Whereas small-caps are viewed as young companies companies with unrealized growth potential. In summary, large caps are view as safer but less returns, small caps are viewed as more risk but higher returns, and mid-caps are a bit in between. Of course, these are generalizations that are not always true.

In the other corner: Growth vs Value

Stocks can also be evaluated based on their price-to-book or price-to-earnings ratios. Based on how a company is doing compared to the average, we can derive an investement strategy in either Growth vs Value.

Growth: choosing winners; invest in companies that have demonstrated better than average growth, because they are expected to continue to do well
Value: bargain hunters; invest in companies that have strong fundamentals but are currently undervalued, because there is profit to be made when the market comes to its senses and the price normalizes
Blend: a little bit of both; just like Goldilocks taught us

When evaluating funds, they typically use a matrix to describe what type of fund it is.

The million dollar question: How to allocate?

The answer always is: it depends on your risk-tolerance/appetite. moneyunder30.com suggests a sensical breakdown:

30% large-cap
20% mid-cap
20% small-cap
20% international
10% bond

My Personal Allocation

In case you forgot, I am not a financial advisor. This is not meant as financial advice. It is a frame of reference on what I do personally. I consider myself very risk-tolerant.

First, you probably heard, past performance is not indicative of future results. Second, data can indicate different conclusions depending on the data set that is used. For example, Large Caps can out performance Small Caps in a certain time frame while the opposite is true in a different period. With that said, studies over a 90 year period and 80 year period, and 26 year period all demonstrated that Value outperforms Growth and Small Caps outperform Large Caps. Hence my allocations based on macro-trends are:

35% Small Cap Value
25% Mid Cap Blend
10% *Other
20% International
5% US Bonds
5% International Bonds

Advanced: Other diversifications

Now we are being really nit-picky. How else can we make more choices?

Additional Assets Class

In 5 Fund Portfolio, they suggested to add REITs. As for me, I personally add Information Technology instead.

Dividing up the world: Developed vs Emerging Markets

Previously, we've only talked about US vs International stocks. We could further divide them by Market Classification. Here are some examples:

Developed Markets: Western Europe, Japan, Hong Kong, Australia, Singapore
Emerging Markets: Brazil, Russia, India, China, Korea, Turkey, UAE

My Actual Personal Allocation

One more time with feelings: I am not a financial advisor.

27% Small Cap Value
23% Mid Cap Blend
20% Information Technology
10% International Developed Markets
10% International Emerging Markets
5% US Bonds (Intermediate Term)
5% International Bonds

Elite

I have still much to learn...

Parting words: Index Funds or Bust

Your 401k provider may provide both Index and Mutual/Managed Funds.

Index Funds track a specific Index, such as S&P 500 (Large Cap) or Russell 3000 (Small Cap). Since it's tracking an index, there's no one there to pick stocks, and hence the management fee is very low.
Mutual/Managed Funds employ a team of professionals to research and pick stocks for their fund. Hence the management fee is much higher in comparison and ranges significantly, so pay attention to the Annual Expense Ratio!. They typically have an objective and asset class. So They can still have a Small Cap fund, but the selections are managed by the team.

It's hard enough to out perform the market. Hence I strictly pick Index Funds when available. And remember to re-balance your portfolio as you age.