The Retirement Book Post
Much of my life has been taken up by time reading anything finance-related I could get my hands on. Sometimes this is a simple investment book or the autobiography of some famous CEO. Sometimes it’s the annual meeting notes of a hedge fund manager or the annual report of a conglomeration I’m thinking of investing in. Recently, it has been blog posts and podcasts on starting an online small business more often than not.
Aside from my own sub-$10k portfolio, a few retirement accounts for family members and whatever knowledge I utilize in my day job underwriting small business loans I haven’t made much use of this habit. So I decided to take some time to make a plan to put whatever info I have gleaned to good use and try to get rich.
Eventually this turned into an eBook with a fun name: 4 Steps to Retiring a Millionaire (Plus 4 More Steps to get Even Richer). The book starts with the requisite basic personal finance lessons. Stuff like compound interest, how to use credit cards and whether you should buy or rent your house.
Most of these things come second nature for those who have had concepts like the time value of money or return on capital beaten into to their brain for four years of undergrad and another year of grad school. But, if you went to school for English, or engineering or manage the KFC where you started working in high school it’s likely there was never much of a reason to think through how to save money and where to put it.
Next, we go into how to increase your income. No one has ever become rich (at least not unless it took them 50 years) by savings $12 more per week. The way you get rich is by creating new income sources and increasing the income you get from your current sources. This can mean buying rental properties, getting a raise at your current job, starting a lawn maintenance business to run on the weekends or even writing eBooks. There more income sources you have the better chance you won’t have rely on inflation level raises to retire comfortably.
To complete the first half of the book, intelligent asset allocation is discussed. Anyone can buy a CD or start a brokerage account and invest in an index fund and the company their uncle works for. The challenge is creating a diversified portfolio where when the stock market is crashing or even just remaining stagnant for years on end the portfolio continues to appreciate because other asset classes pull their weight.
The next four steps are the exciting ones. Well, there are three exciting ones and then one about using debt which is more common sense than exciting.
The first is actively investing. Active investing will be a big focus on this website. I will track my own portfolio, which has both long-term investments and speculations as well as actively manage a portfolio established in my first book, How to Hack Wall St. There are people with a talent for active investing who can increase the return they see with smart asset allocation by 50% or more and I discuss some strategies to achieve this. Unfortunately, these people are few and far between and even worse it takes a lot of work to consistently produce satisfactory investment results – so I also talk about sectioning of portions of the total portfolio to use on different strategies while leaving portions to passive management.
The richest you will get is by starting a successful business. Unless you are part of the vast minority of people who can command a 7-figure salary (plus stock options) starting a business will create more straight cash than getting a raise, or being frugal, or investing in value stocks could dream of. I don’t have a secret sauce on starting a business. If I did my website would look a lot nicer. But I work with small business owners every day in my day job and can speak to, on average, how and when you should start a business and how to make it successful.
The last section, ignoring the boring how to use debt stuff, talks about timing the market. This part was the one I struggled with the most. There are fundamental and technical indicators that help investors and speculators position themselves well in all markets, but none of them are perfect. I talk about using both but never going all in. Any market that has gone down 70% can go down 90% before it rebounds.
Portfolios
I will also be putting together a market timing portfolio to continue to experiment with the concepts discussed in the book. This portfolio will be established in my newsletter over time and then added to the portfolio page on the site.
Books
I recommended a helluva lot of books (only partially so I could make the Amazon commission on them if you buy them from this page), here’s the list:
Books to Read for Section 1
[easyazon_link identifier=”0767923820″ locale=”US” tag=”valueinvesand-20″]The Automatic Millionaire[/easyazon_link] – David Bach
[easyazon_link identifier=”1471148610″ locale=”US” tag=”valueinvesand-20″]Master the Money Game[/easyazon_link] – Tony Robbins
[easyazon_link identifier=”B001NZO1DS” locale=”US” tag=”valueinvesand-20″]Becoming Your Own Banker[/easyazon_link] – R. Nelson Nash
[easyazon_link identifier=”061532682X” locale=”US” tag=”valueinvesand-20″]How Privatized Banking Really Works[/easyazon_link] – Robert P. Murphy & L. Carlos Lara
[easyazon_link identifier=”185788504X” locale=”US” tag=”valueinvesand-20″]50 Prosperity Classics[/easyazon_link] – Tom Butler-Bowdon
Books to Read for Section 2
[easyazon_link identifier=”0471786764″ locale=”US” tag=”valueinvesand-20″]Automatic Wealth for Grads… and Anyone Else Just Starting Out[/easyazon_link]– Michael Masterson
[easyazon_link identifier=”0470267550″ locale=”US” tag=”valueinvesand-20″]Seven Years to Seven Figures: The Fast-Track Plan to Becoming a Millionaire[/easyazon_link] – Michael Masterson
[easyazon_link identifier=”1490313370″ locale=”US” tag=”valueinvesand-20″]Choose Yourself[/easyazon_link] – James Altucher
[easyazon_link identifier=”0307465357″ locale=”US” tag=”valueinvesand-20″]The 4-Hour Work Week[/easyazon_link] – Tim Ferris
[easyazon_link identifier=”B00U867I3S” locale=”US” tag=”valueinvesand-20″]The Side Hustle Path: 10 Proven Ways to Make Money Outside of Your Day Job[/easyazon_link] Vols 1 & 2 – Nick Loper
[easyazon_link identifier=”B009R0XH8G” locale=”US” tag=”valueinvesand-20″]Stealth Income Strategies for Investors[/easyazon_link] – Mark Morgan Ford
[easyazon_link identifier=”B00D9IDSJU” locale=”US” tag=”valueinvesand-20″]Kindle Bestseller Secrets[/easyazon_link] – Derek Doepker
How to Write for Kindle: A Non-Fiction Book in 72 Hours or Less – [easyazon_link identifier=”B00AQRMRLW” locale=”US” tag=”valueinvesand-20″]Nancy Hendrickson[/easyazon_link]
[easyazon_link identifier=”1612680011″ locale=”US” tag=”valueinvesand-20″]Rich Dad, Poor Dad[/easyazon_link] – Robert T. Kiyosaki
[easyazon_link identifier=”B00AB77M5S” locale=”US” tag=”valueinvesand-20″]How to Write a Non-Fiction eBook in 21 Days[/easyazon_link] – Steve Scott
[easyazon_link identifier=”B00C2CH3MM” locale=”US” tag=”valueinvesand-20″]How to Start a Successful Blog in One Hour[/easyazon_link]– Steve Scott
[easyazon_link identifier=”B00C7G5LYK” locale=”US” tag=”valueinvesand-20″]Kindle Publishing Package[/easyazon_link] – Steve Scott
[easyazon_link identifier=”B00D0YUCUQ” locale=”US” tag=”valueinvesand-20″]Email Marketing Blueprint[/easyazon_link] – Steve Scott
[easyazon_link identifier=”B009WUKTXW” locale=”US” tag=”valueinvesand-20″]My Blog Traffic Sucks! 8 Simple Steps to Get 100,000 Blog Visitors[/easyazon_link] – Steve Scott
Books to Read for Section 4
[easyazon_link identifier=”0988679922″ locale=”US” tag=”valueinvesand-20″]Global Asset Allocation: A Survey of the World’s Top Investment Strategies[/easyazon_link] – Meb Faber
[easyazon_link identifier=”031226321X” locale=”US” tag=”valueinvesand-20″]Fail-Safe Investing: Lifelong Financial Security in 30 Minutes[/easyazon_link] – Harry Browne
[easyazon_link identifier=”1118288254″ locale=”US” tag=”valueinvesand-20″]The Permanent Portfolio[/easyazon_link] – Craig Rowland & J.M. Lawson
[easyazon_link identifier=”0470598190″ locale=”US” tag=”valueinvesand-20″]The Gone Fishin’ Portfolio[/easyazon_link] – Alexander Green
[easyazon_link identifier=”1118008855″ locale=”US” tag=”valueinvesand-20″]The Ivy Portfolio[/easyazon_link] – Mebane T. Faber & Eric W. Richardson
[easyazon_link identifier=”047027784X” locale=”US” tag=”valueinvesand-20″]The Fundamental Index: A Better Way to Invest[/easyazon_link]– Rob Arnott
[easyazon_link identifier=”9628606778″ locale=”US” tag=”valueinvesand-20″]Tomorrow’s Gold: Asia’s Age of Discovery[/easyazon_link] – Marc Faber
[easyazon_link identifier=”0743228383″ locale=”US” tag=”valueinvesand-20″]Unconventional Success[/easyazon_link] – David Swensen
[easyazon_link identifier=”1416544690″ locale=”US” tag=”valueinvesand-20″]Pioneering Portfolio Management[/easyazon_link] – David Swensen
[easyazon_link identifier=”0071592814″ locale=”US” tag=”valueinvesand-20″]When Markets Collide[/easyazon_link] – Mohamed El-Erian
[easyazon_link identifier=”0615975070″ locale=”US” tag=”valueinvesand-20″]Berkshire Hathaway Letters to Shareholders[/easyazon_link] – Warren E. Buffett & Max Olson
[easyazon_link identifier=”0544781937″ locale=”US” tag=”valueinvesand-20″]The Only Investment Guide You’ll Ever Need[/easyazon_link]– Andrew Tobias
[easyazon_link identifier=”0470605278″ locale=”US” tag=”valueinvesand-20″]7Twelve: A Diversified Investment Portfolio with a Pla[/easyazon_link]n – Craig L. Israelsen
[easyazon_link identifier=”0988780321″ locale=”US” tag=”valueinvesand-20″]Rational Expectations: Asset Allocation for Investing Adults[/easyazon_link] – William J. Bernstein
[easyazon_link identifier=”1576603660″ locale=”US” tag=”valueinvesand-20″]The Only Guide You’ll Ever Need for the Right Financial Plan[/easyazon_link] – Larry E. Swedroe
[easyazon_link identifier=”0470920041″ locale=”US” tag=”valueinvesand-20″]The Little Book of Alternative Investments[/easyazon_link] – Ben Stein & Phil DeMuth
[easyazon_link identifier=”1932159185″ locale=”US” tag=”valueinvesand-20″]Distressed Debt Analysis[/easyazon_link] – Stephen G. Moyer
[easyazon_link identifier=”0812968719″ locale=”US” tag=”valueinvesand-20″]Investment Biker[/easyazon_link] – Jim Rogers
[easyazon_link identifier=”1118004450″ locale=”US” tag=”valueinvesand-20″]Investing in REITs[/easyazon_link]– Ralph L. Block
[easyazon_link identifier=”0385512244″ locale=”US” tag=”valueinvesand-20″]The Collapse of the Dollar and How to Profit From It[/easyazon_link]– James Turk & John Rubino
[easyazon_link identifier=”0470538759″ locale=”US” tag=”valueinvesand-20″]The Golden Rule[/easyazon_link] – Jim Gibbons
[easyazon_link identifier=”0812973712″ locale=”US” tag=”valueinvesand-20″]Hot Commodities[/easyazon_link] – Jim Rogers
[easyazon_link identifier=”0470460350″ locale=”US” tag=”valueinvesand-20″]Profiting from the World’s Economic Crisis[/easyazon_link] – Bud Conrad
[easyazon_link identifier=”0991513053″ locale=”US” tag=”valueinvesand-20″]World Dominating Dividend Growers[/easyazon_link] – Dan Ferris
Books to Read for Section 5
[easyazon_link identifier=”150100994X” locale=”US” tag=”valueinvesand-20″]The Choose Yourself Guide to Wealth[/easyazon_link]– James Altucher
[easyazon_link identifier=”0470182024″ locale=”US” tag=”valueinvesand-20″]Ready, Fire, Aim[/easyazon_link] – Michael Masterson
[easyazon_link identifier=”1118178440″ locale=”US” tag=”valueinvesand-20″]The Reluctant Entrepreneur[/easyazon_link] – Michael Masterson
[easyazon_link identifier=”1118171411″ locale=”US” tag=”valueinvesand-20″]Family Fortunes[/easyazon_link]– Bill Bonner
[easyazon_link identifier=”1503014517″ locale=”US” tag=”valueinvesand-20″]The Daily Entrepreneur[/easyazon_link] – Steve Scott & Rebecca Livermore
[easyazon_link identifier=”0963020315″ locale=”US” tag=”valueinvesand-20″]The Myth of the Robber Barons[/easyazon_link] – Burton W. Folsom Jr.
[easyazon_link identifier=”B00N4GTEAO” locale=”US” tag=”valueinvesand-20″]How to Be a Billionaire: Proven Strategies from the Titans of Wealth[/easyazon_link]– Martin S. Fridson
[easyazon_link identifier=”8792295045″ locale=”US” tag=”valueinvesand-20″]The Driver[/easyazon_link]– Garet Garrett
[easyazon_link identifier=”1479269387″ locale=”US” tag=”valueinvesand-20″]40 Alternatives to College[/easyazon_link] – James Altucher
[easyazon_link identifier=”0515087378″ locale=”US” tag=”valueinvesand-20″]How to be Rich[/easyazon_link] – J. Paul Getty
[easyazon_link identifier=”1587990725″ locale=”US” tag=”valueinvesand-20″]Ayn Rand and Business[/easyazon_link] – Donna Greiner
Books to Read for Section 6
[easyazon_link identifier=”061597693X” locale=”US” tag=”valueinvesand-20″]The Focused Few[/easyazon_link] – Richard M. Rockwood
[easyazon_link identifier=”0470479779″ locale=”US” tag=”valueinvesand-20″]The Art of Value Investing[/easyazon_link] – John Heins & Whitney Tilson
[easyazon_link identifier=”1611637589″ locale=”US” tag=”valueinvesand-20″]The Essays of Warren Buffett[/easyazon_link] – Warren Buffett & Lawrence Cunningham
[easyazon_link identifier=”1422162672″ locale=”US” tag=”valueinvesand-20″]The Outsiders: Eight Unconventional CEOS and Their Radically Rational Blueprint for Success[/easyazon_link] – William Thorndike
[easyazon_link identifier=”0887305105″ locale=”US” tag=”valueinvesand-20″]Margin of Safety[/easyazon_link] – Seth Klarman
[easyazon_link identifier=”0470624159″ locale=”US” tag=”valueinvesand-20″]The Little Book that Still Beats the Market[/easyazon_link] – Joel Greenblatt
[easyazon_link identifier=”0393338827″ locale=”US” tag=”valueinvesand-20″]The Big Short: Inside the Doomsday Machine[/easyazon_link] – Michael Lewis
[easyazon_link identifier=”0887309704″ locale=”US” tag=”valueinvesand-20″]Money Masters of Our Time[/easyazon_link] – John Train
[easyazon_link identifier=”1400067545″ locale=”US” tag=”valueinvesand-20″]A Gift to My Children[/easyazon_link] – Jim Rogers
[easyazon_link identifier=”0470180919″ locale=”US” tag=”valueinvesand-20″]Invest Like a Dealmaker[/easyazon_link]– Chris Mayer
[easyazon_link identifier=”047122703X” locale=”US” tag=”valueinvesand-20″]The Essential Buffett[/easyazon_link] – Robert Hagstrom
[easyazon_link identifier=”0974797413″ locale=”US” tag=”valueinvesand-20″]Mosaic: Perspectives on Investing[/easyazon_link] – Mohnish Pabrai
[easyazon_link identifier=”0071628185″ locale=”US” tag=”valueinvesand-20″]Applied Value Investing[/easyazon_link] – Joseph Calandro
[easyazon_link identifier=”0988679906″ locale=”US” tag=”valueinvesand-20″]Shareholder Yield[/easyazon_link] – Meb Faber
Books to Read for Section 7
[easyazon_link identifier=”1118758617″ locale=”US” tag=”valueinvesand-20″]The Value of Debt[/easyazon_link]– Thomas J. Anderson
[easyazon_link identifier=”0761147489″ locale=”US” tag=”valueinvesand-20″]I Will Teach You to be Rich[/easyazon_link] – Ramit Sethi
Books to Read for Section 8
[easyazon_link identifier=”0691166269″ locale=”US” tag=”valueinvesand-20″]Irrational Exuberance[/easyazon_link]– Robert J. Schiller
[easyazon_link identifier=”0988679914″ locale=”US” tag=”valueinvesand-20″]Global Value[/easyazon_link] – Mebane Faber
[easyazon_link identifier=”1933550880″ locale=”US” tag=”valueinvesand-20″]Lessons for a Young Economist[/easyazon_link] – Robert P. Murphy