Removing Financial Clutter

How to clean up your portfolio ahead of the new year!

Day 826 | $92,293

The Weight of Financial Clutter

We all know the relief of cleaning out a cramped closet or a messy garage. That physical clutter isn’t just an eyesore; it’s a drain on our time, energy, and mental space.

But what about your portfolio?

If your investment accounts feel just as chaotic - full of forgotten stocks, redundant funds, and complex strategies - you might be suffering from Financial Clutter. Just as minimalism helps us live an intentional life by focusing only on what adds value, decluttering your portfolio helps you focus only on what builds wealth efficiently.

For the dividend investor chasing financial independence, simplicity is the ultimate security.

A minimalist portfolio is an intentional portfolio.

Step 1: The ‘Marie Kondo’ Audit – Identifying What Doesn’t Spark Joy (or Dividends)

The first step in decluttering anything is a brutal, honest audit. Take a deep breath and look at every holding in every account.

1. The Redundancy Trap

In your home, this is having three spatulas. In your portfolio, this is owning six different S&P 500 index funds across three different brokerages, or owning 20 dividend growth stocks when 80% of your income comes from the top 5.

• Action: Identify and consolidate. Do you need three different large-cap value ETFs? Merge them into the single, lowest-cost, most tax-efficient option.

• Personal Note: At the beginning of the year, I had 6 dividend ETFs. I sold 4 and reinvested the proceeds into my 2 favorites: SCHD (Schwab’s Dividend fund) and CGDV (Capital Group’s Dividend Value fund).

2. The ‘Junk Drawer’ Trap

We all have them: those single shares bought on a whim, the speculative stock hyped by a friend, or the “hot sector” fund you bought in 2022 and forgot about. These are investments with no clear place in your dividend or financial strategy.

• Action: Ask yourself: “Would I buy this stock today?” If the answer is no, it’s probably financial clutter. Decide whether to sell it (to harvest tax losses or reinvest in a core holding) or let it ride until it is easier to move.

• Personal Note: My dream car is a Rivian. But I realized that owning this speculative, non-dividend paying stock wasn’t helping me reach my financial independence goals. I took a loss (tax harvesting) and moved on!

3. The Complexity Trap

Are you spending hours tracking five different portfolios, managing individual sector tilts, or calculating tax implications for complicated foreign holdings? This complexity could be draining your time, your most valuable asset.

• Action: Simplify your process. Can you consolidate brokerages or move towards fewer, broader index funds or ETFs?

• Personal Note: I consolidated my Ally and Public accounts into my Fidelity account. Now it’s much easier to track!

Step 2: The ‘Intentional Buy’ Strategy

Minimalists only bring new items into their life with a clear purpose. You need to apply this same intentionality to your stock buys. Define Your Portfolio’s Core Buckets.

Here’s mine:

1. Foundational ETFs: (SCHD and CGDV)

2. Dividend Growth Stocks: (e.g. Visa, Microsoft, United Health)

3. Dividend High Yield Stocks: (e.g. Verizon, Merck, Chevron, Nike)

Every dollar you invest should land in one of these intentional buckets. If a new investment doesn’t clearly fit your defined purpose, think about passing.

Give yourself some grace!

I think its perfectly fine to have one or two stocks that don’t fit your strategy. Mine is Sofi. It’s not currently paying a dividend, although it may one day. But this is my baby. It’s one of the first stocks I bought and has appreciated a ton. It’s one I plan to keep around for a long time.

Step 3: The Behavioral Benefit

Less Clutter = Better Decisions

This is where the power of minimalism truly supercharges your investing behavior.

A complex or cluttered portfolio is an invitation to anxiety and over-trading. When you have 40 stocks to keep up with, you’re constantly looking for reasons to act, which feeds into behavioral biases like:

• Confirmation Bias: You only look for news that validates your existing diverse, complex holdings.

• Analysis Paralysis: Too many choices lead to no action or delayed action.

A lean, clean, (and mean) minimalist portfolio (perhaps 10-20 core holdings) means:

• Fewer Decisions: You spend less time checking stocks and more time living your life.

• Greater Conviction: You know exactly why you own what you own, making you less likely to panic-sell during a market downturn.

• Easier Rebalancing: Your check-in takes minutes, not hours.

The Wrap Up: The Clutter-Free Portfolio

The goal of “A Walk to Wealth” is not just to acquire assets, but to acquire freedom and peace of mind.

Minimalism grants us the freedom from physical possessions. Decluttering your portfolio grants you the freedom from financial anxiety. By applying intentionality, simplicity, and focus to your investments, you shift your energy from managing clutter to growing wealth - making your journey to financial independence steadier and far more peaceful.

Your Homework:

Open your main brokerage account right now and identify one holding you can’t clearly articulate the purpose of. Does it really fit your financial goals or “spark joy”?

If not, maybe it’s time to let it go.

Until next time, keep walking!

Jeremy ✌️

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Disclaimer

This article is for informational and entertainment purposes only. I am not a financial advisor, broker, or tax professional. The information provided reflects my personal opinions and experiences as an individual investor and may not be accurate or current. All investment strategies and investments involve risk of loss. Any ideas presented may not be suitable for all investors and may not take into account your specific investment objectives, financial situation, or needs. Past performance is not indicative of future results. Always conduct your own due diligence and consult with qualified financial professionals before making any investment decisions