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The loss of his status as the richest man in Germany was too much to bear, and he felt like a failure—even though there was still $9 billion left in his pocket!
Do you use money, or does money use you? Like I’ve said from the beginning: if you don’t master money, at some level, it’s going to master you.
We all have the same six needs, but how we value those needs, and in what order, determines the direction of our life.
If we get underneath what you’re really after, it’s not money at all. What you’re really after is what you think money is going to give you. Ultimately, it’s a set of feelings. And beneath those feelings are needs.
NEED 1: CERTAINTY/COMFORT The first human need is the need for Certainty.
NEED 2: UNCERTAINTY/VARIETY
The third is Significance,
You can get significance by having more or bigger problems than anybody else.
Spending a lot of money can make you feel significant,
knows people will pay for anything they believe is “the best”—anything that makes them feel special, unique, or important; anything that makes them stand out from the crowd.
The fourth basic need is Love and Connection.
Number five is Growth.
NEED 6: CONTRIBUTION
Life is really about creating meaning. And meaning does not come from what you get, it comes from what you give.
think about how money can fulfill the six human needs. Can money give us certainty? You bet. Variety? Check. Obviously it can make us feel important or significant. But what about connection and love? In the immortal words of the Beatles, money can’t buy you love. But it can buy you that dog! And it can, unfortunately, give you a false sense of connection because it attracts relationships, although not always the most fulfilling kind. How about growth? Money can fuel growth in business and in learning. And the more money you have, the more you can contribute financially.
believe: if you value Significance above all else, money will always leave you empty unless it comes from a contribution you’ve made.
When you are pursuing money, don’t forget why you are pursuing it. You’re trying to meet some emotional and psychological desires. Underneath those emotions are the needs that must be fulfilled for your life to be extraordinary.
The fastest way to feel connection, a sense of how significant your life is, a deep sense of certainty and variety, and put yourself in a state where you can give to others, is to find a way each day to appreciate more and expect less.
The wealthiest person on earth is one who appreciates.
I interviewed Sir John Templeton for the first time when I was 33 years old. Remember, he was the multibillionaire who started with nothing and made all of his money when everyone else was afraid, during the worst times in history: WWII, Japan after the war, and in the late 1980s and early 1990s when massive inflat...
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him, “What’s the secret to wealth?” And he said, “Tony, you know it, and you know it well. You teach it...
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When you’re grateful, there is no fear; when you’re grateful,...
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What if you took on the new belief that everything in life happens for a reason and a purpose, and it serves you? What if you believed in your heart of hearts that life doesn’t happen to you, it happens for you? That every step along the way is helping strengthen you so that you can become more, enjoy more, and give more. If you’ll start from that place, money won’t be the source of your pleasure or your pain. Making money will just be a fun journey of mastery, and wealth a great vehicle to achieve what matters most in life.
most investors do not make money over time.
I want you to imagine that someone comes to you with the following investment opportunity: he wants you to put up 100% of the capital and take 100% of the risk, and if it makes money, he wants 60% or more of the upside to come to him in fees. Oh, and by the way, if it loses money, you lose, and he still gets paid! Are you in? I’m sure you don’t need any time to think this through. It’s a no-brainer. Your gut response has to be, “There’s no way I’m doing this. How absurd!” The only problem is that if you’re like 90% of American investors, you’ve invested in a typical mutual fund, and, believe
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Money Power Principle 1. Don’t get in the game unless you know the rules!
“This do-it-yourself pension system has failed,”
changed? We exchanged our guaranteed retirement pensions with an intentionally complex and often extremely dangerous system, filled with hidden fees, which gave us “freedom of choice.”
Giving up a disproportionate amount of your potential returns to fees is just one of the pitfalls you must avoid if you plan on winning the game.
On the other hand, nearly all mutual fund companies have a stacked deck. They are the ultimate casino. They’ve captured you, you’re going nowhere, and they are guaranteed revenue whether you win or not.
After 2008, when the US stock market lost more than 37%, the financial world was completely changed for most Americans. Even five years later, a survey from Prudential Financial showed that 44% of American investors still say they would never put their money in the stock market again, while 58% say they lost faith in the market.
backed by one of the largest banks in the world, that will give you 100% principal protection guaranteed by its balance sheet and allow you to participate in 75% to 90% of the upside of the market (the S&P 500) without being capped! That is not a misprint. You can participate in up to 90% of the upside, but if the market collapses, you still get back 100% of your money!
Risk comes from not knowing what you’re doing. —WARREN BUFFETT
The core concept of successful investing is simple: Grow your savings to a point at which the interest from your investments will generate enough income to support your lifestyle without having to work.
There are two phases to your investing game: the accumulation phase, in which you are socking away money for growth, and the decumulation, during which you are withdrawing income.
the number one fear of baby boomers: the fear of outliving our money.
to have unconventional success, you can’t be guided by conventional wisdom.
A low-cost S&P 500 index fund will achieve this goal. —WARREN BUFFETT, 2013 letter to shareholders
When you look at the results on an after-fee, after-tax basis, over reasonably long periods of time, there’s almost no chance that you end up beating the index fund. —DAVID SWENSEN, author of Unconventional Success and manager of Yale University’s more than $23.9 billion endowment FINANCIAL ENTERTAINMENT When you turn on the financial news today, you can see that it is less “news” and more sensationalism.
And the stock market has indeed been the best long-term investment over the past 100 years.
“$1 million invested in stocks in 1935 is worth $2.4 billion today (if you held on).”
But few firms will discuss what is sometimes called the $13 trillion lie. (That’s how much money is in mutual funds.) Are you ready for this?
An incredible 96% of actively managed mutual funds fail to beat the market over any sustained period of time!
individually, or trying to pick the next highflyer, you can diversify and own a piece of all 500 top stocks simply by investing in a low-cost index fund that tracks or mimics the index.
The point here is that by investing in the index, you don’t have to pay a professional to try picking which stocks in the index you should own. It’s effectively been done for you because Standard & Poor’s has selected the top 500 already.
Even Warren Buffett, known for his incredibly unique ability to find undervalued stocks, says that the average investor should never attempt to pick stocks or time the market.
invested only in indexes so that she minimizes her cost and maximizes her upside.
From 1984 to 1998, a full 15 years, only eight out of 200 fund managers beat the Vanguard 500 Index. (The Vanguard 500, put together by founder Jack Bogle, is a mirror image of the S&P 500 index.)
Just how badly does chasing performance hurt us? Over a 20-year period, December 31, 1993, through December 31, 2013, the S&P 500 returned an average annual return of 9.28%. But the average mutual fund investor made just over 2.54%, according to Dalbar, one of the leading industry research firms. Ouch! A nearly 80% difference. In real life, this can mean the difference between financial freedom and financial despair. Said another way, if you were the person who simply owned the S&P 500, you would have turned your $10,000 into $55,916! Whereas the mutual fund investor, who was sold on the
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when the market falls, when we can’t take the emotional pain any longer, we sell. And when the market is up, we buy more.
