Save early to invest, invest in index funds with less expense ratio, weigh tax treatment for appropriately placing funds in baskets, draw not more than 4% post retirement, financial freedom is achieved when your asset base is equal to 25 times your annual expenses.. These are some take-away from this book.
Solid book on investment and portfolio building. I really wish I had read this book a few years earlier and highly recommended to everyone.
Things to avoid 1. Avoid debt. 2. Avoid fiscally irresponsible people. Never marry one or otherwise give him or her access to your money. 3. Eliminate all non-essential spending 4. Avoid investment advisors. 5. Never buy stocks on margin. 6. Safety is a bit of an illusion. Don't fall for it. 7. Spending too much time worrying about how things might work out. It’s a huge waste. Don’t do it.
On Saving and thrifty lifestyle 1. Save and invest unwavering 50% of your income. 2. The beauty of a high savings rate is twofold: You learn to live on less even as you have more to invest. 3. When you can live on 4% of your investments per year, you are financially independent. 4. If your lifestyle matches or exceeds your income, you are a slave. 5. Better to adapt yourself and your attitudes to the numbers than to adapt the strategies to your psychological comfort levels. 6. If financial independence is your goal, your savings rate in these years should be high. As you invest that money each month it serves to smooth out the market’s wild ride. 7. Be persistent. Life is uncertain.
On Stock market and Investing 1. Investment rules: Rule #1: Never lose money. Rule #2: Never forget rule #1 2.The stock market is a powerful wealth-building tool and you should be investing in it. 3. Embrace indexing. 4. Crashes, pullbacks and corrections are all absolutely normal. 5. Any investing done short term is by definition speculation. 6. Market timing is an un-winnable game over time.The point is that to play this market timing game well even once, you need to be right twice: First you need to call the high. Then you need to call the low. 7. The market always recovers. Always. 8. Everybody makes money when the market is rising. But what determines whether it will make you wealthy or leave you bleeding on the side of the road is what you do during the times it is collapsing. 9. Most people lose money in the stock market. Here’s why: 1. We think we can time the market. 2. We believe we can pick individual stocks. 3. We believe we can pick winning mutual fund managers. 10. By dollar cost averaging you are betting that the market will drop, saving yourself some pain. For any given year the odds of this happening are only ~23%. But the market is about 77% more likely to rise, in which case you will have spared yourself some gain. With each new invested portion you’ll be paying more for your shares. 11. Put all your eggs in one basket and forget about it.
On F-You Money 1. Money is a small part of life. But F-You Money buys you the freedom, resources and time to explore it on your own terms. Retired or not. Enjoy your journey. 2. Once you have your F-You Money, all you need do is make sure you continue to reinvest to outpace inflation and keep your spending below the level your stash can replenish. 3. You’re young, aggressive and here to build wealth. You’re out to build your pot of F-You Money ASAP. You’re going to focus on the best performing asset class in history: Stocks. You’re going to “get your mind right,” toughen up and learn to ride out the storms.
It's an awesome book to understand the importance of fiscal prudence in our life. The understanding of financial world is critical to manage money otherwise we could be living fiscally imprudent life, and destroying the wealth rather than preserving and investing it to build wealth.
this book has been written in a simplistic manner and explains the do's and don'ts of investing very clearly. it is a must for anyone thinking about investing . it gives a technical and psychological insight to the world of investment.
Things made simple clear and easy... Seemed very logical advise..Loved most parts of the book..Though it's mainly written for US market perspectice one can easily Corelate it to any developing market..