Thoughts and observations for those investing on their own or contemplating doing it themselves.
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Sunday, November 18, 2012
2 Great Weekend Reads
Understand that you don't have to buy into their respective life style or investment philosophies 100% to benefit from them.
For example, Andrew Hallam is a 100% indexer and thinks hard about lifestyle. His mission is to lay out a clear path to creating wealth. To that end, he has written Millionaire Teacher.
I get it that indexing turns off some investors. I understand that some people just can't buy into the idea that indexing will outperform most investors who actively seek to beat the market. I've met a lot of people who have no doubt that they can pick high-priced mutual funds that will be in the 10% that will outperform the market over the long term after all fees.
And I know for a fact that most people have never been challenged on the frugality front.
On the investment front, many investors like matching wits with Mr. Market, like the challenge of analyzing individual stocks to try and pick winners, and bask in the adrenaline rush of timing the market.
But you can both index and invest actively. You can invest in line with Hallam's philosophy with 70% or 80% of your money (I always recommend at least 80%!) and try to beat the market with the rest - if that's how you want to spend your time. By doing this, you can have the best of both worlds: having the bulk of your assets invested with the odds on your side à la Hallam's approach and meaningful assets seeking to capture what the industry calls "alpha." One thing Hallam will teach you, unambiguously, is how to avoid the cost of investing in high-priced funds and using high-priced advisors!
The second blogger, Mr. Money Mustache, is frugality (frugal, not cheap - he will teach you the difference) to the extreme. In his strong language, engaging style, he provides a path for young people to be able to retire early by thinking hard about life style. Again, you don't have to buy in 100% by, say, seeking to live close enough to your job so that you can bike to work. I believe, however, after reading Mustache you will question why you're buying that huge flat screen TV for your small apartment when you have unpaid credit bills.
In fact, it wouldn't surprise me if most of you who read the piece below join the rapidly growing army of Mustachions!
This interview of Andrew Hallam, "How I Made My First Million," lays out the key points of his book Millionaire Teacher. Here is a piece that lists his "Nine Laws to Financial Freedom."
Here is a piece, "Get Rich With: Good Old-Fashioned Hard Work," by Mr. Money Mustache. It is representative of his engaging style and includes (warning if you've got sensitive ears) strong language and a valuable lesson for young and old alike.
Posted by Robert Wasilewski at 9:02 AM
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Both are excellent bloggers! I actually started following MM after your suggestion in an earlier post. Glad I did!ReplyDelete
Agreed, both are great sites! Good to see them spreading the education.ReplyDelete