This book will describe how to invest your finances so that you have control and get ahead, remain performing ahead of the vast majority of people (even those with financial planners) regardless of the economic situations.
It will be the beginning of the end of feeling frantic about money. The end of tuning into the latest financial advice. The end of jumping at a market jump or crash to buy or sell, or trying to predict a bubble and pick when to sell.
It can transform the job of managing your finances into a place where you aren’t at the mercy of economic fluctuations, aren’t needing to watch markets closely, aren’t needing large amounts of money or loans to invest (like buying property) AND it can have you continually positioned to be on a good growth path, with assets growing, and regular dividend payments available.
I’ve tried to summarise all the best bits of what this provides. But something worth considering before you go on is the best bits will be for yourself – what are you actually trying to achieve? What are your goals?
Because “earning a million dollars”… might happen over 10 years, but by the time you earn that you’ll probably be dissatisfied with it. And “earning a billion dollars in 5 years”… might be possible, but you have to do some things that are hectically risky that no one can easily do them – like build rockets and colonise mars before Elon? …risks that no one is going to take. And some people do try launch at something that has a chance of makign big money quickly, but its fallen short and now they’re broke or scrounging for the next idea to make big money… which will be risky…
So clarify what your money goals are before you read this, and before you think this is not getting you where you want to be.
Total financial freedom?
The idea of “total financial freedom” is probably interpreted as being able to say “I want that” and being able to have it, relatively soon, because of your buying power is bigger or better positioned than everyone else. And living like that would likely make you an unfit spoilt brat with crap attitude, and people won’t want to be around (other than to get money from…). You get to realising that the human mind and impulses are fleeting, affected by emotions and environment, and real freedom is on the other side or discipline.
Or is the goal to “buy whatever I want”… it turns out other people want things as well, and owning something isn’t that great if its not doing you a service like helping you get to where you want to be. Most things need maintenance, and/or servicing, and if they’re valuable they should be insured…. And knowing the human preferences are emotional, fleeting, dependent on surroundings… put some mature thought into the idea of buying “whatever I want” with your money.
So, my opening line for this book is my attempt to articulate what this book will provide you: knowledge and processes to “invest your finances so that you have control and get ahead”.
And so, I realise that given what I’ve pointed out above, part of what this book needs to do is shape your view on what you’re trying to do. Shape your perspective on what you’re doing with money, so that you get to what you’re really after (the mature part of you – not the child part or emotional part).
But hand in hand with that: you need to keep yourself from trying to grasp at a hot idea, a thing to buy, or the surface-level steps of a process, that sound like a leg-up jump in your cashpot. They won’t save you. You need the bigger concepts, the reasons and the long-term outcomes – because they’ll be the things that pull you through; keep you aligned beyond other people, keep you on track to the long term goals. Keep you on the path when the stock-market crashes; when you hear of the latest share that’s going to go 10x; the latest bitcoin or new bright shiny thing that you think is the one thing that’s been missing that will be your saviour.
Cause I can give you the summary. Just the bare bones of what you need to do. In the simplest form, with only the most non-subjective actions.
The Who, What, Where, When, How…. its on the next post.
But reading that might have you change your mind about reading on. Reading on is whret the actual improvements are – the nuances, the proof of why you’ll get ahead, how to stay ahead, and the reasons why.
BUT….. there’s lots of buts.
Its not so easy, cause things happen, views change, economies and the world changes, and as dad would say “certain people get involved”. (There were very few people who were ok to be involved, who may do it as good as him. But otherwise, he’s the greatest and no one else should be involved.)
So this blog/page/book is about the BUTs – what things distort, distract or diverge you from this straight forward solution.
“Spare Money”?
What’s defined as spare money? More on that later. But the Barefoot Investor theory described in the original book (of that title) is a good starting point / model. It recommends 60% of your income go towards your everyday expenses like rent, bills and mortgage, 20% to your fire extinguisher fund, 10% to your splurge fund and 10% to your smile fund.
Dad’s recommendation is that all of your “fire extinguisher” and “smile” fund type money goes into buying the types of shares I mention; while you mentally considered it as holding your Fire Extinguisher concept, and your Smile fund concept, and other growing savings etc.
That means jumping onto your online share trading account and buying qtys of low cost ETFs
But that’s just the start. Once you have a portfolio growing of those shares, and continue to increase your holding when investing money becomes available, the gains and financial position improves with each step / consideration / nuance that follows… which I will go on to explain.
But a lot of what I will be describing is to not do anything else:
Not sell. Not change strategy. Not convert into a different share.
All that you need will flow from this, and I’ll explain how…
This book will present the considerations that have been explained to me by my dad, will show what he’s pointed out, will include his ruthless conversations with other financial advisors, with examples of what’s happened to their portfolios, etc, … will lay all this out for you, to allow you to make your decisions.
This book is a collection of Dad’s advice, with my translation.
He has said things to me by way of “do this, and only this”
This book won’t do that. Firstly because that’s financial direction, and gets lawyers excited about forming a law suit.
Dad forced it upon me as desperate instruction. I’m not doing that. I will instead point out what he pointed out to me, combined with what I’ve learned from my own education (Masters of Applied Finance, Macquairie University and Engineering (Civil) Degree; and several other courses, and many books read and summarised on the topics) and will leave it to you to do what you want.
Because following the commentary in this requires sticking to it for the long term. Dad would say, we’re long-term prodigious investors; not people who will jump at the latest flashy looking thing, ring their hands together at clutching a few more dollars back from tax, excited by the latest snake oil sales deal (that’s a metaphor… in ye olden days a wagon would roll into town with someone selling the latest “snake oil” that would cure your diseases, make you amazing, fend off clowns,,, or whatever the latest fad was in fashion then. Then they’d roll out of town with your money.).
But its not just about buying X. The outcome this will shape you for, call it “winning like a boomer” requires you to learn the lifestyle and money management that is called for by this book. The habits, the perspectives, the way or handling… that’s where most people will fall off rails. Will diverge, distract, defer, etc….
This is a guide to managing finances. Yes there’s lots of them – this one is about the things that you won’t hear from financial advisers, etc.
There are many great resources you may already know of… books like Rich Dad, Poor Dad; The Millionaire Next Door; the Barefoot Investor; Money: Mastering the Game.
I include a summary of all these. This is meant to align with those books. I see this as a kind of extension of those books. Because those books don’t all work all completely for me now, in today’s way of operating and finance etc.
So, some things might divert, or extend differently to those books but, look at where they’re sending your finances, where this guide is.
Main point: this book is a collection of advices from a Baby Boomer who amassed plenty, from passive investing.
Intent is to become a farmer.
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