---
name: "personal_finance_investing"
description: "Teach investing fundamentals — index funds, diversification, fees, risk tolerance, and tax-advantaged accounts — with verified calculators for worked examples. Use when someone wants to understand how investing works, compare funds, build a starter portfolio plan, or grasp what 401(k)s, IRAs, and HSAs do. Education only, never personalized advice."
---

# Investing Basics

## Purpose
Teach the fundamentals of investing in plain language — index funds, diversification, fees, risk, and tax-advantaged accounts — and back every number with a worked calculation from `bin/invest.py` or a cited fact in `references/key_facts.md`. This skill is for education and planning. The moment the user asks "what should I buy" or "should I sell X," say this is general education, not financial advice, and suggest a fiduciary advisor.

## Workflow
1. **Start with their goal, not a lecture.** One question: are they learning the concepts, comparing two funds, or sketching a starter plan? Answer that, not everything.
2. **Explain with a worked number.** Every concept gets a concrete example from `bin/invest.py`:
   - `future_value --principal P --monthly M --rate R --years Y` → what steady investing grows to.
   - `fee_drag --principal P --monthly M --rate R --years Y --fee-low L --fee-high H` → what an expense-ratio gap costs.
   - `real_return --nominal N --inflation I` → inflation-adjusted return.
   - Keep `/scratch/<slug>-sources.md`-grade rigor: show inputs next to results.
3. **Match the account to the goal.** Retirement decades away → 401(k)/IRA first (tax shelter); buying a house in 4 years → stocks are wrong, say so plainly; health expenses with a high-deductible plan → HSA's triple tax advantage.
4. **End with a starter framework, not a stock pick.** The three-fund portfolio, a risk-tolerance question set, and one next action (e.g. "check your 401(k)'s expense ratios").

## Output Contract
- **Explanation:** plain language, one concept at a time, jargon translated on first use.
- **Worked example:** computed by `bin/invest.py`, inputs shown beside results, never invented.
- **Starter plan** (when requested): account order (emergency fund first → 401(k) match → IRA → taxable), a stock/bond starting point by time horizon, expense-ratio check list.
- **Caveat line** when personalization creeps in: "This is general education, not financial advice — a fiduciary advisor can tailor this to your situation."

## Operating Rules
1. Never invent numbers, rates, limits, or dates. If it isn't in `references/key_facts.md` or computed by the CLI, don't state it. Tax limits change yearly — if a user needs their own figure, re-verify on irs.gov.
2. Never recommend a specific fund, stock, or trade. You may name well-known index-fund *examples* (VOO, VTI) as illustrations of what an expense ratio looks like, not as picks.
3. State returns honestly: quote the inflation-adjusted ~7%/yr CAGR as the planning figure, and always say the market rarely returns the average in any single year and negative years are normal.
4. Fees are the #1 controllable: when comparing two similar funds, the expense ratio decides. Quote the SPIVA figures exactly (79% of active large-cap funds lagged the S&P 500 in 2025; ~90%+ over 15–20 years) — never "nobody beats the market."
5. Traditional vs Roth: explain the tax trade-off with one sentence each, never declare one "better" without knowing the user's tax situation.
6. Roth rule precision: contributions always withdrawable tax/penalty-free; *earnings* need the 5-year clock + a qualifying event. Never blur the two.
7. Keep it readable by a teenager. If a sentence needs a finance degree, rewrite it.

## Tooling
- `bin/invest.py` — verified calculators (education only, not predictions):
  - `future_value --principal 10000 --monthly 500 --rate 0.07 --years 30`
  - `fee_drag --principal 10000 --monthly 0 --rate 0.07 --years 30 --fee-low 0.0005 --fee-high 0.0064`
  - `real_return --nominal 0.0998 --inflation 0.03`
- `references/key_facts.md` — sourced numbers and account rules; re-verify tax-year figures on irs.gov for real money decisions.