A Personal Investment Blueprint

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A lifetime investment strategy will never be one-size-fits-all. Instead, your investment choices and decisions should accurately reflect where you are in your working career lifespan. Before you make any investment decisions, take the time to get the right perspective in place first.

Your goal as an investor is really to create two different and distinct revenue streams:

1. A retirement revenue stream: the steady amount of money coming in each month that will be used to maintain your desired lifestyle throughout your retirement years.

2. A discretionary revenue stream: extra money that can be used at any time to buy luxuries and other non-essentials which make life fun.

It’s vital that you understand and accept that you need to think and act differently about these two revenue streams. For example, you don’t want to speculate with your retirement revenue stream–this has to be available irrespective of the ups and downs of the economy or the stock market. Equally, if you fail to speculate with your discretionary pool of capital, you can miss out on the impressive gains that can literally supercharge your returns.

Managing both pools of capital differently requires that you have the time and inclination to do so. For example, to create a diversified portfolio for your discretionary revenue stream, you’ll need a minimum of five stocks in different sectors of the economy. You’ll need at least one hour per week to study everything you’ll need to maintain each share holding and to stay current with what’s happening with each company. If you cannot realistically commit to doing the background work required, you’re far better off investing your discretionary funds in a mutual fund rather than trying to make investment decisions for yourself.

Note also the increasing dominance of fixed-income investments in your retirement investments. This may seem counterintuitive when every other market commentator states stocks are the best long-term investment there is available. The point, however, is bonds and other fixed income investments preserve capital. Their value doesn’t get affected by the health of the economy as a whole or by the swift downturns that have always characterized the stock market. As you get closer to the stage where your retirement income stream will become vital, caution should dominate your planning.

Most people only have three rules when it comes to their personal investment strategy:

1. You make the most by buying and holding stocks.
2. Trading stocks is always wrong, owning stocks is always right.
3. Speculation is the height of evil and very risky.

To address these common myths:

1. Buy-and-hold does work well if you’ve picked a company that’s moving forward, but it is absolutely ridiculous to do so while you watch a good company go bad. Buy-and-hold assumes a level of ease and perfection that does not exis in the real world.

2. Trading–short-term buying and selling of stocks–far from being an evil is actually the only way you can lock in your gains. The emergence of discount brokers who will execute trades for a few dollars rather than hundreds of dollars has significantly changed the dynamics of share trading, and made it a vital part of intelligent investing.

3. If you don’t take advantage of a little speculating at some stage, you run the risk of missing out on an opportunity to turn a limited amount of capital into a monster homerun. Pure and simlpe, speculation helps you get ahead in a way no other investment strategy can. Equally, it holds the potential to wipe you out financially if overused or applied within an inappropriate context. The key is not to avoid speculation entirely, but to bet on emerging situations you have total conviction about and with an appropriate amount of money.

Think and Grow Rich

The Way to Personal Achievement

by Napoleon Hill (08400)

All achievement, including every fortune ever built, have their beginning in an idea. The wealth comes from turning the idea from something we can see in our mind’s eye alone into something that serves other people, and for which they are willing to pay. This is done through auto-suggestion, organized planning, mastermind association and an inner harmony between the thoughts of your mind and the actions and achievements of your life.

You literally become and achieve what you think about all day long. To control your life, control your thoughts.

“The ladder of success is never crowded at the top.”

“Success requires no explanations. Failure permits no alibis.”

“Happiness is found in doing, not merely in possessing.”

“Anybody can wish for riches, and most people do, but only a few know that a definite plan, plus a burning desire for wealth, are the one dependable means of accumulating wealth.”

The Millionaire in You

Ten Things You Need to Do Now to Have Money and the Time to Enjoy It
Michael LeBoeuf (04700)

At the end of the twentieth century, one in every fourteen U.S. households had a net worth of $1 million or more. In practical terms, that means the opportunity to obtain the financial freedom to do whatever you want is statistically closer now than at any other time in history.

For most people, however, the goal is not simply to achieve millionaire status, but to have sufficient time and money to do whatever they feel passionate about. In other words, money alone, without the time to enjoy it, is not so great.

Put differently, true financial freedom means to have enough money and enough time to enjoy it. To achieve that in practice, you have to master four different skill sets:

1. You need to make enough money so you have discretionary funds to invest.
2. You have to learn how to save money rather than spending every dime you make (and borrowing still more).
3. You must master how to invest your money in such a way it will continue to appreciate in value regardless of the market cycles.
4. You need to know how to enjouy your money — something most people consider a no-brainer.

Relatively few people manage to master all four skills, but until you do, financial freedom will remain just like a mirage, which is consistently beyond your grasp. And yet, if you commit to learning and doing everything that’s requjired, you almost certainly will become a millionaire.

So how do you create the millionaire that already lies inside you?

1. See the possibilities, which lie in abundance everywhere around you every single day.
2. Do what it takes to create your fortune using your unique set of skills, talents and interests.
3. Know when to step back, celebrate your financial freedom and enjoy it.

The Millionnaire in You

Wealth at a Glance

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Ideas from publications by Napoleon Hill, Brian Tracy, Laura Nash and Howard Stevenson

Leading a wealth life is a goal that many people dream of from the time they begin their careers (those of uncommon talent may nurture this dream from childhood). And while we start out thinking of wealth in purely monetary terms, as we grow older and gradually see that there is more to life, this dream begins to evolve.

All human behavior begins with a thought, and achieving wealth is no exception. This is because thoughts have the power to penetrate into the subconscious, govern our beliefs and behavior, and transform impulses into rewards. In this respect, man is a marvelous creation. We have only to believe in something deeply, and we can turn it into reality. Other than self-imposed limitations, our lives are filled with boundless possibilities, and poverty and wealth are both products of our thinking. If you want to achieve wealth, first learn how to apply your thoughts.

Once you have decided on a clear direction, it’s time to move forward step by step. The best way to achieve your dreams is to follow in the footsteps of successful people. How does one do this? Should you attend the same schools? Or move in the same circles? No and no. All you need to do is study the habits of successful people, make these habits second nature through repetition, and you too can become a successful person.

Human life is an ongoing process of pursuit. As children we pursue good grades, and as adults we pursue success. Our desires are like arrows, and the target keeps getting moved higher and higher. But does this kind of life lead to happiness and satisfaction? There’s no such thing as a perfect life, so in the end we need to make choices about our goals in life. How much happiness do we need? What level of achievement? How much significance? What legacy do we want to leave behind? The foolish try to have it all, but the wise know that “just enough” is the best path to happiness. As it turns out, the secret to a truly wealthy life lies in the wisdom of give and take.

Personal Money Management at a Glance

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Money and time are two themes that always seem to be in conflict in people’s lives: some people have money but no time to enjoy it; others have plenty of time but empty pockets; and most people have little of either. Why is it so difficult to have it all in life?

Can money buy happiness? While the answer is open to debate, one thing we can be sure of is that money can buy us a lot of freedom. With a regular income sufficient to support your desired lifestyle, you will be able to enjoy freedom that other people only dream of: financial freedom, free time, and freedom to choose the work you do. But without money, none of this is possible.

But how do we go about obtaining this money? Unless you inherit it, or win the lottery, there is only one path to wealth:
1. Earn money
2. Make your money earn for you
3. Use this money to earn even more money

Making money is simple, and begins as soon as you enter the workforce. Next, to use your money to earn for you and make even more money, you must learn how to set up an effective investment portfolio and maintain steady investment returns.

A comprehensive investment portfolio includes three key components: stocks and mutual funds, real estate and starting a business.

By following these three paths, you can create three simultaneous income streams. This will enable you not only to fulfill your dream of becoming a millionaire, but even to achieve this wealth in a third of the time it takes most people. Does this seem a bit fast? Just enjoy the thrill of rapid wealth creation.

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