The Gone Fishin' Portfolio - Alexander Henry Green

Скачать книгу

Regular saving remains the safest, easiest and most effective way to boost your portfolio. True, it means making hard choices. But, ultimately, you are the person responsible for your financial well-being.

      Rare is the individual who stumbles on financial freedom accidentally. Unless you've got a rich relative with a bad heart—and a soft spot for you—whether you end up a slave to money or its master will depend mostly on you and the choices you make.

      REEL IT IN …

      1 There can be no successful investment program without saving. And significant saving requires fiscal discipline.

      2 A high percentage of American workers are not adequately saving, which impacts their likelihood of a sound retirement.

      3 Participating in a 401(k) or IRA program is a great route to savings. But you should also save at least 10% of your after-tax income.

      4 Most high-net-worth individuals did not strike it rich, but, rather, had the discipline to live beneath their incomes and save the difference between their net income and expenses.

      5 Finding that perfect balance between saving and spending is key to living happily now and in retirement.

      6 Saving generally means prioritizing financial freedom over high living.

      The exceptional person has a vision—of great performances, of a great career, of a great something—and doesn't care what others may say or think.

      Source: Bob Rotella, Bob Cullen, “How Champions Think: In Sports and in Life”, Simon and Schuster, 2016. © 2016, Simon and Schuster

      During my 35-year career as an investment analyst, I've sought to discover how ordinary people in this country become wealthy, distill this knowledge to its essence and share it with others.

      I'm now convinced that to reach your most important investment goals it's essential to develop what I call a “prosperity mindset.” This is an investor's most critical asset.

      Your mindset is the filter through which you see the world. It determines how you spend your time, what decisions you make and how you invest your money.

      1 You understand the habits and choices that allowed tens of millions of ordinary Americans to become wealthy.

      2 You recognize the major trends—historical, political, cultural, technological and financial—that are making things better for most people in most places in most ways.

      3 Based on these trends, you maintain a rational optimism about the future, especially when the nation or the world experiences short-term setbacks, as we always do from time to time.

      4 You have a coherent plan that gives you a high probability of achieving your most important financial goals.

      5 And you are committed to following through to achieve those goals.

      Let's start with understanding how most wealthy Americans got that way.

      According to The New York Times, there were 18.6 million millionaires in the United States in 2019.

      Spectrem Group reports that there were also more mass affluent households with a net worth between $100,000 and $1 million, excluding primary residences: 31.8 million, or nearly 1 in 4 households.

      Yet a Federal Reserve survey that same year found that nearly 80% of Americans live paycheck to paycheck. Half say they would have trouble finding $400 to pay for an emergency.

      This is a dramatic disparity, and it has hardly gone unnoticed. People tend to measure their well-being not according to their own material comfort against, say, their parents’, but against their peers.

      As a result, economic inequality has become an obsession in recent years. President Barack Obama called it “the defining challenge of our time.” Pope Francis called it “the root of social evil.”

      Conventional wisdom holds that the richest Americans are hoarding the nation's wealth while everyone else stagnates or loses ground. This isn't just untrue. It's laughably wrong. Yet most people don't understand why.

      Yes, the affluent have been getting richer faster than everyone else. But that's not terribly surprising in a knowledge-based economy, where education and specialized skills are in high demand.

      However, economic inequality in itself is not morally objectionable. What is objectionable is poverty. Our goal should not be that everyone has the same. It should be that everyone has enough.

      This confusion of poverty and inequality is due to what psychologists call the “zero-sum fallacy.” This is the mistaken notion that wealth is a finite resource—like a pizza—that is divvied up in zero-sum fashion. So if Oprah Winfrey has more money, I necessarily have less.

      That's not how the economy works. Wealth isn't just distributed. First it has to be created. Total wealth increases—and occasionally decreases—over time. The size of the economy, the amount of household income and total household net worth rise as the years go by.

      If you're a worker who would like to increase your pay, it's important to know that earned income is generally decided by nine factors:

      1 Your educational attainment

      2 Your chosen profession and specialization

      3 Your years of experience

      4 Your hours worked

      5 Your work ethic

      6 Your social skills

      7 Your competence and proficiency in your job

      8 Your ability to cooperate with, inspire and lead your co-workers

      9 Your ambition to rise in the organization.

      If you want to earn more, the choice is clear: Make yourself indispensable to someone.

      Yes, some people are born with greater genetic gifts than others. You and I, unfortunately, were not born with the looks of Brad Pitt, the athleticism of LeBron James or the intellect of Isaac Newton.

      Some of us are dealt better hands than others. Some are born with higher IQs or into high-income households (with all the advantages they confer) or to more nurturing parents. But we each need to play the hand we're dealt to the best of our ability.

      From an economic standpoint, that means maximizing your education and marketable skills; showing competence, reliability and integrity at work; and doing whatever you can to rise in the organization. (Or seek out better alternatives elsewhere.)

      Complaining that “capitalism is broken,” “the system is rigged” and “life isn't fair” will not increase your income or net worth one penny. It is, however, guaranteed to make you bitter and unhappy.

      Beyond income inequality, there is another form of economic disparity in this country. Some households have a much higher net worth than others. There is a significant wealth gap.

      Is this unfair? Not necessarily. In my many decades as a money manager, investment analyst and financial writer, I've learned that wealth accumulation is

Скачать книгу