[investing_framework]
Updated: May 9
The Strategy Behind My Accelerated Path to FI and 200%+ Equity Returns
An overview of the investing framework I used to achieve financial independence by 35 - the principles, decisions, tax strategies, and lessons learned
Most individual investors fail to achieve market-beating returns not because they pick the wrong stocks, but because they overcomplicate their approach, underestimate the tax planning, fail to regulate their emotions, and attempt to chase the 'next big thing' (i.e., FOMO)
Disclaimer - this is not explicit financial or investment advice. It's simply an opportunity to share my own experience and framework for reference purposes. Your situation - income, risk tolerance, timeline, location, tax residency, etc. - will be different. Weigh these factors accordingly.
In this post, I'll go deeper on my investing framework that help enable my accelerated path to financial independence - the planning, principles, lessons learned, and tax considerations. This isn't a tutorial on which stocks to pick, nor a longwinded way to say you should only buy index funds, but something a little more esoteric - the mental model I employed broken down across five key principles.
Multiples
total comp growth 2018 - 2025
200%+
portfolio returns 2022 - 2025
35
financial independence achieved
PRINCIPLE 01
Income First, Investing Second: You Can't Compound What You Don't Have
The first step in your investing journey and road to financial independence should be introspection. Take an honest look at your station in life - what you do, what you make, and what you might be leaving on the table. What could you do differently to help advance your value and therefore your earning potential? Is it more discipline, further training or education, chasing a promotion, or possibly making a career change? As cliché as this sounds, it's likely true. Most people simply choose to ignore these tough questions or make up excuses because that's easier than the alternative, doing the work. As a result, they'll often tip-toe through life without realizing their own career or earning potential. And yes, obtaining that next milestone is likely difficult, but anything in life worth achieving is.
Growing your earning potential is the single most important investing variable you control. The higher your income, the greater your savings rate, and therefore your ability to invest. The biggest factor in my drastic net worth increase from 2018 onwards wasn't my investment decisions, but rather a rapidly growing income which empowered a significant savings and investment rate. Prioritizing income increases towards investing rather than lifestyle inflation amplified my existing investment strategy.
For me, every lifestyle and career milestone - moving to San Jose in 2018, chasing several job promotions that followed, and relocating to Washington State in 2023 - were all investing events. Each one created a step-change in investable capital. The move to the US alone tripled my take-home pay (on a currency-adjusted basis). Moving out of California then enabled me to double my post-tax savings rate. These aren't investing decisions in the conventional sense, but they were key parts of a master plan to achieve financial independence through growing cash flow and reducing expenses.
The practical implication for anyone reading this is that an investment in oneself will likely net you the highest return on investment (ROI). Everything else is secondary.
KEY TAKEAWAYS
1) The best investment is an investment in oneself - maximize your earning potential through furthering yourself
2) Geographic, lifestyle, and career decisions are all investing decisions - think through these carefully
3) Every incremental dollar is an opportunity to widen the gap between earning and spending, accelerating wealth creationPRINCIPLE 02
Conviction Without Complexity: The Case for Staying Concentrated (Until You Shouldn't)
For several years, my portfolio was heavily concentrated in US technology and mega-cap equities. Some of this was deliberate - I had high conviction in continued American economic and technology excellence - and some of it was structural and challenging to avoid. When working in tech and receiving a considerable portion of your total compensation in restricted share units (RSUs), you accumulate a concentrated position whether you intend to or not - vesting schedules be damned.
I learned the cost of portfolio concentration the hard way. From 2019 through 2022, I held a significant quantity of vested RSUs in my employer's stock rather than selling and diversifying. Was it greed, blind faith, ignorance, or a combination of all three? I don't know, but I watched a sizable portion of my net worth evaporate over a short period of time as the 2022 tech bubble burst. This would have been largely avoided had I taken a more structured and deliberate approach and treated those shares as compensation to reallocate, not investments to hold. I learned a valuable and expensive lesson.
The approach I've followed since is simple and non-negotiable - always sell on vest, every time, without exception, and reinvest the proceeds directly into the market. The rational is simple - treat RSUs as income. They vest as compensation, are taxed as ordinary income at vest, and represent a single-stock concentration in a company that already pays my salary, bonus, and benefits. The same goes for Employee Stock Purchase Plans (ESPP) - I'll gladly take the discounted shares, but I sell immediately on purchase. I'm already exposed to my employer's fortunes through my human capital - voluntarily doubling down through equity retention is not conviction, it's ignorance parading as loyalty.
Conventional financial advice recommends that you address concentrated positions immediately - sell individual stocks, buy broad market index funds, and eliminate asymmetric risk. In principle, this isn't wrong, but in practice it's more nuanced - the tax burden of unwinding a concentrated position that has appreciated significantly is often overlooked, and the opportunity cost of abandoning a high-conviction play can be substantial. My approach was more deliberate. I initially held a small, concentrated portfolio where I had deep conviction in those plays, diversified incrementally as positions appreciated (being mindful of tax considerations), and introduced index funds as diversification hedges. For Washington State, this means keeping my realized capital gains under $270,000 per year - not impossible, but an important threshold to be mindful of.
Reaching my FI number in late 2025 forced me to think differently. My strategy shifted from capital appreciation to capital preservation. Concentration risk that was once acceptable, even rational, became harder to justify once I established a considerable asset base. The upside of outperformance was less meaningful than the downside of a concentrated drawdown. With this in mind, I began to sell off individual names and reinvest in more diversified plays. I still hold individual conviction plays, but I limit these to a small percentage per ticker.
KEY TAKEAWAYS
1) Sell employer RSUs and ESPP on vest, every time - they are income to be redeployed into other plays, not stock picks to be held
2) At vest, RSU cost basis equals fair market value - there is no tax cost to selling (a incorrect assumption I initially held); the concentration argument disappears
3) Holding employer stock concentrates both your financial capital and your human capital - that's not strategy, it's ignorant
4) For legacy concentrated positions with sizable gains, diversity incrementally to minimize tax drag, and re-distribute to index funds
5) Reaching FI forces you to think differently about risk - the preservation of capital is now more important than appreciationPRINCIPLE 03
Staying Invested Through the Despair: What 200% Returns Actually Required
2022 was brutal. The market handed tech investors one of the worst YTD experiences in recent memory - the NASDAQ fell over 30% from peak-to-trough, and some individual names did much worse. For anyone holding a concentrated tech portfolio, that period represented a material contraction that shaved several years of gains. However, investors that were able to endure the gut-wrenching volatility were rewarded handsomely in subsequent years.
Leading up to this, I made a series of high-conviction speculative bets during the euphoric bull market of 2021 - positions in companies and asset classes that the market priced irrationally. Some were hyper-growth companies, some were names that attracted significant retail enthusiasm, but some of these bets were horrible misjudgments. I took real losses on those positions - not catastrophic, but meaningful - and they were completely avoidable had I been more disciplined. That market period rewarded recklessness with short-term gains long enough to convince participants that they were geniuses - then it corrected, swiftly and abruptly, a humbling experience.
What I learned during this period was invaluable. The euphoria surrounding such bull markets distorts reality - they make speculative bets feel like they have asymmetric upside with limited downside, when in reality the asymmetry is the exact opposite. A rational response to a clearly inflated environment is to be disciplined, hold a diversified core, limit speculation, and ignore the noise. I didn't do that consistently, and I paid for it the following year. However, not all was lost, as I still managed to make more right decisions than wrong ones. I stayed invested - I maintained the majority of my equity positions and continued investing in quality names with quantifiable/qualifiable moats (i.e., competitive advantages), despite the drawdown. Not because it felt comfortable (it was anything but), but because my thesis hadn't changed - the structural case for technology remained intact, albeit muted. Many fundamentally strong, competitive, and well positioned companies were oversold - they were not distressed, they were simply repriced. Those are different things, and conflating them is one of the most common and costly errors individual investors making during corrections.
In the years that followed - the recovery through 2023, AI-driven acceleration in 2024, and continued appreciated in 2025 - generated returns that vindicated my discipline and thesis. My portfolio delivered north of 200% gains over this three-year period, enabling me to hit my FI number. This was not a result of a well-timed trade, but a product of conviction - holding (and buying) oversold, quality assets and not panic selling like the rest of retail was telling me to.
KEY TAKEAWAYS
1) Euphoric markets create a distortion - speculation feels asymmetric - they're not, the asymmetry is often reversed
2) Bad bets during the 2021/2022 bull market were a lesson in the difference between conviction and FOMO - know which one is driving your position
3) The 2022 correction was a re-pricing of core holdings, not a fundamental breakdown
4) 200%+ returns from 2022 to 2025 were available to anyone who held core and stayed invested
5) Exercising discipline during drawdowns is more valuable than market insight during rallies (in my experience, success is less about making the right bets, and more about avoiding the wrong bets)PRINCIPLE 04
The Tax Layer: Accelerating your Outcome
One of the most under-appreciated dimensions of personal investing - especially at income levels that make young financial independence achievable - is taxes. Not in the abstract sense, but in the specific, structural sense of how to prioritize investment contributions across various tax-advantaged vehicles, and the related geographic or jurisdiction considerations that either preserve or erode wealth.
For me - a Canadian national earning US compensation, holding assets across two tax jurisdictions, living in a state with no income tax, and receiving a significant portion of income as equity - the tax dimension is as important as the individual investment decisions. The order in which you prioritize (and fund) your investment accounts matters, tremendously. The following is my priority structure - yours may vary depending on other factors (e.g., state of residence, donations, 529s, etc.)
First - 401(k) pre-tax - up to employer match (capture 100% of employer match before anything else, unmatched 401(k) comes later)
Second - HSA - max contribution (the only triple-tax-advantaged account in the US system)
Third - Backdoor Roth IRA (non-deductible traditional IRA to immediate Roth conversion)
Fourth - 401(k) pre-tax - max out the remainder (up to $24,500 as of 2026)
Fifth - Mega Backdoor Roth IRA (post-tax 401(k) contributions immediately converted via in-plan Roth conversion; up to $47,500 as of 2026, but this is reduced for every dollar of employer match)
Sixth - Taxable brokerage contributions
In 2022, Washington State introduced a 7% capital gains tax on gains above the annual exemption threshold ($270,000 as of 2026). This added another layer of complexity for my highly concentrated, appreciated portfolio. Re-balancing activities that would normally be straightforward now require planning to manage this threshold. My approach has been to stagger realizations across tax years - harvesting gains in tranches rather than liquidating positions in a single year - and to prioritize re-balancing inside tax-advantaged accounts where the Washington State tax doesn't apply.
The final wrinkle is cross-border complexity. As a Canadian in the US, the tax complexity compounds further. I recommend a pragmatic approach - once you move to the US, only hold US-domiciled funds in US accounts. Full stop. Your existing Canadian holding require a deliberate decision - sell before departure, wind down gradually, or accept heinous tax reporting obligations. Unfortunately, there is no simple or easy answer to this - this is exactly the kind of nuance a cross-border financial accountant can assist with.
KEY TAKEAWAYS
1) Investment vehicle prioritization matters (yours may vary): 401(k) match -> HSA -> Backdoor Roth IRA -> Mega Backdoor Roth IRA -> Taxable brokerage
2) Understand your state's tax structure. Washington State's 7% capital gains tax requires a staggered realization strategy for large appreciated positions
3) A cross-border tax advisor is not optional at this level of complexity - they pay for themselves many times overPRINCIPLE 05
What I'd Do Differently
If I could roll back the clock, here's what I'd do instead. You should question any investor that isn't able (or willing) to share lessons learned - they're either inexperienced or misleading.
One - sold vested RSUs immediately. Between 2018 and 2022, I held a significant quantity of vested RSUs in employer stock rather than selling and diversifying. The position declined materially during that period, taking a meaningful portion of my net worth with it. My mistake was simple - I failed to treat vested shared as income to be redeployed rather than a position to be held. I now always sell on vest.
Two - minimized speculative bets during the 2021/2022 bull market. The euphoria of that period impaired my judgement, and I didn't realize this until it was too late. Those losses were earned - a lesson in the difference between a thesis and a trend.
Three - accelerated my diversification strategy. I would have diversified even before achieving my initial FI number (yes, a moving target). The psychological cost of sitting through a 30% drawdown in a sizable portfolio is real. Earlier diversification would have produced slightly lower returns, but substantially more peace of mind.
Four - moved earlier. The November 2022 relocation from San Jose to Washington State enabled me to more than double my savings rate. Every year spent in California was another year of added friction to achieving my FI goal. The option of moving was available much earlier (anytime after March 2020), I just didn't capitalize on this sooner. California is a great place to visit, but not my pick to live.
Five - accelerated 401k and Roth investments. I didn't max out my tax-advantaged accounts in the first few years after moving, largely because I lacked the knowledge. Every year you delay is a year of tax-free contributions you lose. Earlier is always better when you have decades of tax-free compounding ahead of you.
KEY TAKEAWAYS
1) Sell RSUs immediately
2) Limit speculation in bull markets
3) Accelerate diversification
4) Relocate earlier
5) Maximize tax-advantaged accounts asapSUMMARY
The Five Principles
I've distilled this post into five key principles, outlined below. The difficulty isn't understanding them, it's having the discipline to follow them without wavering.
1 - Savings rate is the prerequisite
You can't grow and invest money you don't have. Maximize income and savings rate before optimizing portfolio construction. Career, lifestyle, and location decisions are all fundamental to investing and reaching FI.
2 - Conviction beats diversification, until it doesn't
Portfolio concentration through strategy is rational. Concentration through ignorance or indifference is a liability. Know what you're holding and have a tax-aware plan defined to address it. Prioritize capital preservation over appreciation once you hit (or are nearing) your FI number.
3 - Staying invested
The investors who generated the best returns over the past 10 years weren't necessarily the best analysts - they were the most disciplined. Methodology beats prediction, every time.
4 - Taxes quietly build or erode wealth
Physical location, investment account allocations, residency status, and cross-border considerations all have a material impact on after-tax returns. Optimize this through hiring professional help.
5 - Simple and sustainable beats sophisticated and impulsive
The best investing strategy is the one that you can execute consistently across several market cycles, life events, and emotional states. Complexity is the enemy of consistency - keep it simple, stupid.
The 2022 - 2026 stock market produced exceptional outcomes for technology-tilted portfolios that had conviction through the correction. The next cycle may reward a different posture. I'll be ready, will you?
I believe what I profess is durable and true - the importance of maximizing your earning potential; the importance of discipline and conviction; the value of tax-awareness; and the advantage of simplicity maintained over time. Apply this as you see fit.
Stay invested.
MAK
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