Personal Finance Interview with Aaron Patzer of

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Save more, spend smarter, and make your money go further

Aaron Patzer CEO of Mint Software

Name: Aaron Patzer
Profession: Founder & CEO of Mint Software
Networth Range: $100,000+

Current Financial Strategy:

After a lifetime of reading books on money management, it turns out personal finance can really be reduced to three basic principles:

  • Spend less than you earn
  • Make the money you have work for you
  • Plan for the unexpected

I try to follow all three.

The first one is perhaps the most difficult. Living within your means basically boils down to only buying the things you really need, and consciously saving up for all the fun stuff. I have two cars, a 1994 Jaguar and a 1996 Ford Contour. I bought both used (or “pre-owned” if you want to feel better about yourself), and paid cash. The Contour isn’t worth much, so I don’t pay for comprehensive & collision on the insurance. I intend to drive both into the ground. If I want to have fun, I’ll rent a convertible on vacation. I rarely dine out. Instead I learned to cook (which impresses the ladies ;-), is healthier, and saves a lot of money. Last week to celebrate Mint’s Series A financing, I made filet mignon for two. Total cost ~$25; in a restaurant, easily $100+.

I also pay off all my credit cards in full every month. If you have the discipline to do this, use your credit card for everything. It’s safer than the debit card, gives you an interest free loan for 30 days, and rewards (points or better yet cash back) for anything you buy. The best card for you depends on how and where you use it (e.g. 5% cash back on gas might be the best if you commute, 3% cash back on groceries may be the best card for a family). Let Mint automatically figure it out for you.

“Make your money work for you” means I invest almost everything I save. I usually assume an 8% real return on my money: 11% average S&P return from 1980-2006, minus 3% inflation. If I put away $500/mo each month from age 30 onward, it means $1.2m by retirement, even though I would have only “saved” $210k. Compound interest is a beautiful thing.

I invest almost exclusively in index and mutual funds. Individual stocks vary too wildly, and being a busy CEO, it’s too difficult to keep up with all the relevant news/developments with any one company. My favorite funds are probably the Vanguard S&P 500 index fund (low expense ratio), and the Royce small-cap funds (long term performance).

“Plan for the unexpected” recognizes that stuff happens. You might lose your job, get sick, or have a family emergency. I keep about $15,000 (3 months expenses) in savings just in case. I could invest this amount, but if I needed it, I might be forced to sell just as the market is tanking.

Now, putting your emergency stash in a Wells Fargo or BofA account would be dumb. Instead I keep the bulk of it in ING Direct (4.50% interest). Emigrant Direct is up to 5.05% so I’ve been contemplating a switch (plus Mint has been suggesting it, and I ought to listen to the software I designed!).

Best Financial Tip:

Put 10% of your earnings straight into a stock index fund.

You’ll never see it in your bank account so you won’t miss it, and within 10 years, you’ll be seriously rich. If you actually do this one thing, I guarantee you’ll soon be (financially) ahead of 99% of the people in the world.

Worst Financial Move Ever:

Buying individual stocks, and then neglecting them.

Individual stocks vary wildly. If you pick wrong, and then forget to look at them for a year, half your money is gone. I’ve done it at least twice. Here’s what went wrong: I read a book, got very ambitious to learn all I could about a company, its industry, competitors, and growth potential. That went well for a couple weeks, sometimes even a couple of months – but, well, I got busy.

My current resolve is to rely on mutual funds – have a full-time professional worry about protecting the downside, and optimize for the upside. I spend a weekend once a year selecting the best mutual funds I can find, put money in automatically each month, and then mostly forget about it. Seriously, that’s all I do. No more individual stocks until I can devote an hour or more each day to investing…and who has that kind of time?

Financially, I need Help With:

Managing my spending and making sure I don’t get ripped off.

I mentioned before that the first principle of personal finance is spending less than you earn. To do that, you really need to see exactly where you money goes, and make sure you’re getting the best price on everything. I mean, who really knows if they’re on the best wireless plan? They come out with a new promotion every week and I always suspect I’m not on the best plan available.

What personal finance tools do you currently use to track and manage your money?

Mint of course!

With gas prices rising, do you know how much you spend at the pump?

Don’t know. Fortunately Mint does.

What’s in My Wallet?

Capital One – Personal

Capital One – Business Rewards

5th 3rd Debit Card

Barnes & Noble Gift Certificate (thanks mom)

Blue Shield Insurance

Progressive Insurance

AAA Membership Card

Safeway Club Card

Mint Business Cards

Building access card (Mint is a secure location)

$51 cash (been there forever since I always use a credit card)

Save more, spend smarter, and make your money go further


Written by Mint

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