You won’t get rich quickly with index funds, but that’s not the point. As we’ve discussed, your path to financial freedom is a high cash flow, which, over time, produces a high net worth and enormous savings. Yes, you invest your savings and intend for it to grow, but you’re investing not gambling. You’re not after a one-time lucky stock pick. You want reliable returns in the long run. And as CFO of You, Inc., you don’t want to be one of those whose investments underperform the market as a whole. At the same time, you recognize it’s not worth the time and effort to outperform the market, which is nearly impossible to do over the long term anyhow. (Trying to outperform the market is what leads many people to underperform!) You choose instead to employ an investment strategy so simple it almost seems like cheating: You aim to match the stock market’s performance. You settle for a long-term average real return of 6.8%. And in doing so, you take comfort in the knowledge that your strategy will outperform TK% of all other investors. Section Three: Master Your Money Note that this section may be superfluous or very, very short (one page for each item?). For one, I haven’t written any of this material. For another, we’ve covered much of it elsewhere in the book. Still, I like the idea of closing with these topics. …Manage Expectations Forget the Joneses Create barriers Pre-commit …Keep it Simple Limit options Avoid complexity Possessions are a prison Pay cash for EVERYTHING …Tune Out the Noise Ignore the news Coping with marketing (avoid, train yourself, advertise to yourself) Fight financial trolls
You won’t get rich quickly with index funds, but that’s not the point. As we’ve discussed, your path to financial freedom is a high cash flow, which, over time, produces a high net worth and enormous savings. Yes, you invest your savings and intend for it to grow, but you’re investing not gambling. You’re not after a one-time lucky stock pick. You want reliable returns in the long run. And as CFO of You, Inc., you don’t want to be one of those whose investments underperform the market as a whole. At the same time, you recognize it’s not worth the time and effort to outperform the market, which is nearly impossible to do over the long term anyhow. (Trying to outperform the market is what leads many people to underperform!) You choose instead to employ an investment strategy so simple it almost seems like cheating: You aim to match the stock market’s performance. You settle for a long-term average real return of 6.8%. And in doing so, you take comfort in the knowledge that your strategy will outperform TK% of all other investors. Section Three: Master Your Money Note that this section may be superfluous or very, very short (one page for each item?). For one, I haven’t written any of this material. For another, we’ve covered much of it elsewhere in the book. Still, I like the idea of closing with these topics. …Manage Expectations Forget the Joneses Create barriers Pre-commit …Keep it Simple Limit options Avoid complexity Possessions are a prison Pay cash for EVERYTHING …Tune Out the Noise Ignore the news Coping with marketing (avoid, train yourself, advertise to yourself) Fight financial trolls
Fear,%20Flow,%20Freedom,%20Finance.docx