<ul><li>Human capital outweighs investment capital</li><li>As such, you can take aggressive risks</li><li>But, you are probably too risk-adverse</li><li>It's better to limit stock exposure to 50% until you know how you will react in a crash</li><li>If you can hold on, or even buy more while the market is down, increase your exposure</li><li>The most import thing is to save and invest like your life depends upon it</li></ul>

Beginning Stage Investing

<ul><li>The win condition is to have 20-25 times your annual cash flow needs in assets</li><li>If you win, quickly shift your core investments to low-risk categories</li><li>Delaying Social Security to age 70 can greatly reduce your cash-flow needs later in life</li><li>If it looks like you aren't going to win, reduce your cash flow needs</li></ul>

End Game

<ul><li>The trickiest stage / most dependent on luck</li><li>Transition assets into a passive income stream</li><li>Watch closely for the win condition</li><li>Do not stop saving and investing</li></ul>

Middle-life Investing

<ul><li>Lump-sum: the timing of market peaks and troughs do not matter so long as the general trend is upwards</li><li>Periodic contributions: it is best for the market to sustain heavy losses early in your investments (cheap stocks) and high gains later</li></ul>

Lump sum vs. Periodic Contributions

"The Ages of the Investor: A Critical Look at Life-cycle Investing" is intended to be the first installment in the "Investing for Adults" series. Just as grown-ups do not believe in the Tooth Fairy, the Easter Bunny, or Santa Claus, “Investing adults” know that there is no such creature as the Stock-picking Fairy or the Market-timing Fairy. Further, there is no Risk Fairy who will write you cheap options that will protect your stock holdings against loss. Investing adults are familiar with Gene Fama, Zvi Bodie, Jack Bogle, and Burton Malkiel, and understand that a mean variance optimizer does not blend vegetables. In other words, this series is not for beginners. Future topics will, with luck, include the limits of market efficiency and diversification in increasingly non-segmented global markets.

moneyandinvestments

Money & Investments

books

Books

"The Ages of the Investor: A Critical Look at Life-cycle Investing" is intended to be the first installment in the "Investing for Adults" series. Just as grown-ups do not believe in the Tooth Fairy, the Easter Bunny, or Santa Claus, "Investing adults" know that there is no such creature as the Stock-picking Fairy or the Market-timing Fairy. Further, there is no Risk Fairy who will write you cheap options that will protect your stock holdings against loss. Investing adults are familiar with Gene Fama, Zvi Bodie, Jack Bogle, and Burton Malkiel, and understand that a mean variance optimizer does not blend vegetables. In other words, this series is not for beginners. Future topics will, with luck, include the limits of market efficiency and diversification in increasingly non-segmented global markets.

William J. Bernstein

The Ages of the Investor

<ul><li>Learn from the masters</li><li>Reverse engineer what works</li><li>"... we don’t have to be original in life" -- Green</li><li>Be ferocious and shameless in your cloning</li></ul>

Cloning

<ol><li>Value an asset</li><li>Buy it for much less than it's worth</li></ol>"Take a simple idea, and take it seriously." -- Charlie Munger

The Core of Investing

<ul><li>Excercise</li><li>Sleep</li><li>Nutrition</li><li>Meditation</li></ul>When you are under stress, reduce complexity in your life by focusing on these four qualities.

Four Basic Qualities of Life

<ul><li>Hungry</li><li>Angry</li><li>Lonely</li><li>Tired</li><li>Pained</li><li>Scared</li></ul>A mnemonic device for remembering these is:HALT PSUse this device before making high-stakes decisions, and analyze yourself to see if you are in any of these states.

Six States That Increase Mistakes

In order to become great at something, find what makes someone bad at that thing, and do the opposite.

Inversion Engineering

Lessons After 40+ Interviews of the Greatest Investors with William Green - Investing for Beginners 101

"The investing business is not the same as investing in a business"Forces that are not related to day-to-day business that can affect the price of stock:<ul><li>Buying fervor and bull markets</li><li>Sell-offs, even marginal ones (~10%)</li><li>Speculation about future profits</li><li>Changes in dividend payouts</li><li>Performance of indirectly related stocks</li></ul>

Wall Street is NOT Main Street

<ol><li>High-dividend US stocks, funds, and ETFs</li><li>High-yielding foreign stocks and funds</li><li>Rising dividend stocks and funds</li><li>High-yielding Dow stocks</li><li>Business Development Companies (BDCs)</li><li>Real-estate investment trusts (REITs)</li><li>Energy and commodity stocks</li></ol>

Skousen's Golden 7 Investments

<ul><li>To make significant gains, you have to identify undervalued assets</li><li>Once the majority of investors can identify an asset is valuable, it's not undervalued</li><li>Thus the highest profit investments are always contrary to the general trend</li></ul>

Contrarianism

<ul><li>Dividends are an under-appreciated indicator of stock growth</li><li>Companies that can pay good dividends tend to be more stable and less likely to decline in value</li><li>Re-invested dividends provide flexibility</li><li>There are strategies and funds that seek to maximize dividend returns</li></ul>

Dividends

Why are the smartest, most successful professionals so often failures when it comes to investing? Can stock prices really be so illogical that even doctors and lawyers can't figure them out? Ultimately, is it possible for anyone to decipher the financial markets? Fortunately, the answer is yes. In Investing In One Lesson, investment guru Mark Skousen clearly and convincingly reveals the reasons for the seemingly perverse, unpredictable nature of the stock market. Drawing upon his decades of experience as an investment advisor, writer, and professor, Dr. Skousen explains in one spirited, easy-to-follow lesson why stock prices fluctuate with such apparent irrationality. Lifting back the veil of perplexity and confusion that surrounds the workings of the stock market, Dr. Skousen explains: *Why good news for the economy is often bad news for the stock market *Why stocks of old, established companies in shrinking industries tend to be a better investment than shares in rapidly growing firms in cutting-edge fields *Why stock prices can suddenly skyrocket or collapse--regardless of market fundamentals *Why initial public offerings often enrich insiders at the expense of the majority of investors *How Wall Street is like a giant casino--and how it isn't The perfect investment primer, Investing In One Lesson provides an introduction to everything from day trading to contrary investing to chart-based techniques. Dr. Skousen's book concludes with a comprehensive but simple investment strategy to maximize your returns without having to dedicate countless hours to researching the market. Dr. Skousen packs his book with entertaining personal and professional anecdotes illustrating his central point--that the business of investing is not the same as investing in a business. He offers investors a wide-ranging but accessible course on investing history, psychology, and strategy--all in one lesson.

Why are the smartest, most successful professionals so often failures when it comes to investing? Can stock prices really be so illogical that even doctors and lawyers can't figure them out? Ultimately, is it possible for anyone to decipher the financial markets? Fortunately, the answer is yes. In Investing In One Lesson, investment guru Mark Skousen clearly and convincingly reveals the reasons for the seemingly perverse, unpredictable nature of the stock market. Drawing upon his decades of experience as an investment advisor, writer, and professor, Dr. Skousen explains in one spirited, easy-to-follow lesson why stock prices fluctuate with such apparent irrationality.

Mark Skousen

Investing in One Lesson

<ul><li>Making up for lost time and health at the end of your life is not the only way to live</li><li>Your job title and what you buy do not need to be who you are</li><li>Teach yourself skills you were paying others to know</li><li>Health is a state of being, not a product you can buy from a doctor or insurance broker</li></ul>

"Making a Living" vs. Living

<ul><li>"... An omnivore always has more options available when solving the problem of eating"</li><li>Strategy is a "web of actions" that will not fail when any one plan does</li><li>Shift focus from goals to how you set goals</li><li>Build skills for navigating lifestyles not skills specialized to a lifestlye</li></ul>

Life Resilience

Products you purchase should have these qualities:<ul><li>Low lifetime cost</li><li>Durability</li><li>Resale or exchange value</li><li>Transportablity</li><li>Ease of maintenance</li></ul>

What to Purchase

Small <a href="https://www.google.com/search?client=ubuntu&hs=wp0&channel=fs&sxsrf=ALeKk01-26DHBlph0Wk5ZqKZE0cnaLGSyA:1620937355210&q=critique&spell=1&sa=X&ved=2ahUKEwjYloqavsfwAhXCqZ4KHa9HCocQkeECKAB6BAgBEDA">critique</a>: Fiskar's four types all have masculine titles. Obviously, people can be a part of the workforce regardless of gender.<ul><li>Salary man — one source of invariable income</li><li>Working man — freelancer with variable income</li><li>Businessman — entrepreneur focused on profit</li><li>Renaissance man — generalist fairly independent of the marketplace</li></ul>

Four Types of People

"How to retire in your 20s and 30s (without winning the lottery). This book provides a robust strategy that makes it possible to stop working for money in less than a decade."--P. [4] of cover.

personaldevelopment

Personal Development

A strategic combination of smart financial choices, simple living, and increased self-reliance brought me financial independence at 30 and allowed me to retire from my profession at 33. Early Retirement Extreme shows how I did it and how anyone can formulate their own plan for financial independence. The book provides the principles and framework for a systems theoretical strategy for attaining that independence in 5-10 years. It teaches how a shift in focus from consuming to producing can help people out of the consumer trap, and offers a path to achieving the freedom necessary to pursue interests other than working for a living. The principles in Early Retirement Extreme show how to break the financial chains that hold people back from doing what they truly want to do. The framework has been used by many people over the last few years to accomplish a variety of goals. It provides people a means to achieve almost any goal, whether it's debt-free living, extended travel, a sabbatical, a career change, time off to raise a child, a traditional retirement, or simply a desire for a more resilient and self-sufficient lifestyle. The book was initially written for people in their 20s and 30s, but its ideas aren't limited to early retirees. Middle-aged people in the grips of consumerism can use the principles to take back control of their lives. People closer to retirement age who don't feel adequately prepared can use it to set themselves up for a comfortable retirement in a relatively short period of time. Anyone worried about their financial future can use the principles in Early Retirement Extreme to make their future more secure.

The Ages of the Investor

Lessons After 40+ Interviews of the Greatest Investors with William Green - Investing for Beginners 101

Investing in One Lesson

Early Retirement Extreme

Isaiah Nixon