Personal finance for engineers, explained as systems
Free short books and calculators that show how compounding, risk, and cash flow work, with the math visible.
01 // The math is shown
Every calculator lists its formula and assumptions, so you can check the result instead of trusting it.
02 // State Machine Model
Treat your balance sheet like a system: income in, spending out, a cash buffer for shocks, and investments that compound.
03 // No affiliate links
No affiliate links or sponsored content. Read our editorial policy.
Simulate the Compounding State Machine
Adjust the control variables below to observe how repeated compounding grows capital faster over time.
State Parameters
End State (t = 20y)
Illustrative projection. Assumes a constant annual return, contributions at the end of each month, and no taxes, fees, or inflation. Actual returns vary and can be negative. Educational content, not financial advice.
Stock & ETF Condition Screener
Screen your 30-ticker watchlist against moving-average conditions (21-DMA and 200-DMA crossovers, uptrend alignment, 52-week highs) using 100% native GOOGLEFINANCE formulas. Zero add-ons, no coding required.
Short Books Explaining the Mechanics of Wealth
First-principles guides designed for analytical minds. Unabridged online reading, verified formulas, and downloadable editions.
The Money Loop
How compounding makes returns generate returns
Growth becomes part of what grows. When an investment earns a return, that return joins the capital base and begins earning returns of its own. Explore how compounding turns time into an exponent, why early growth feels imperceptible, and how Maya beats Leo by starting 10 years earlier.
Buy the Average
Dollar-cost averaging, turned into a simple investing system
You do not need to predict tomorrow when your system is engineered to work across every market condition. Deconstructs dollar-cost averaging: the fixed-dollar effect, why volume-weighted cost per share is strictly lower than average price via the harmonic mean, Maya vs. Leo, and the compounding crossover milestone.
Fault Tolerant
How diversification protects your portfolio from a single point of failure
In software engineering, we design production systems so one component can fail without bringing the entire application down. In this third volume of Money Under the Hood, we model portfolio diversification through fault tolerance: single points of failure, Maya vs. Leo concentration, the Zero Test, position-size scaling law, idiosyncratic vs. systematic risk, and the 30-stocks correlation trap.
Four Systems Mental Models for Financial Capital
How technical principles map directly to capital preservation, growth dynamics, and risk control.
Compounding as Recursive State
Saving a fixed amount grows linearly: S(t) = S0 + C*t. Compounding introduces a non-linear recurrence relation where elapsed cycle count sits in the exponent. For example, contributing $500/month at a 7% annual return for 25 years (inputs: $0 principal, $500/mo, 7% return, 25 years; $150,000 contributed) yields $405,036. Starting 5 years later for 20 years (inputs: $0 principal, $500/mo, 7% return, 20 years; $120,000 contributed) yields $260,463—a difference of $144,573 in growth from just $30,000 in additional contributions.
Read Compound Interest GuideDownside Asymmetry & Volatility Drag
The average annual return overstates what you actually compound at when returns are volatile. A 50% loss requires a 100% gain just to return to parity; an 80% loss requires a 400% gain. In systems terms, ruin is an absorbing barrier: capital preservation strictly precedes return optimization.
Dollar-Cost Averaging as Algorithmic Execution
Discretionary market timing is high-latency, emotionally compromised speculation. Automating dollar-cost averaging operates like a deterministic cron job: scheduled idempotent execution that naturally acquires more units at local troughs and fewer at peaks.
Read Dollar-Cost Averaging GuideLiquidity Buffers as Circuit Breakers
In distributed systems, unbuffered queues drop requests under peak stress. In personal finance, an unbuffered balance sheet forces emergency liquidations of compounding equities during market drawdowns. Cash reserves let you cover a shock without selling investments at a bad time.
View Liquidity Buffer in Glossary