To gain financial freedom is the main goal for everyone.In his book Tony Robbins brings us powerful insights about how we can accomplish this,he is an American bestselling author ,entrepreneur and life coach.
Investments are in Robbins view a way to gain financial freedom.He has identified four core principles in making investment decisions:
1) DON'T LOSE
2) ASYMMETRIC RISK/REWARD
3)TAX EFFICIENCY
4)DIVERSIFICATION
Warren Buffet famous investor has two important rules on investing:
1) DONT LOSE MONEY
2)NEVER FORGET RULE NO 1
For many of us to invest in trade public companies sounds something scary. People should know that stocks over the long run will be high,in the last 100 years we had a Great recession and 2008 financial crisis.
For average investors Tony recommend to invest in low index fund like ''Vanguard'' and to try to avoid as much as you can ''mutual funds''It's well know that most of the mutual funds do a terrific job.They charge you high fess and a study showed that only 96% failed to beat the market over 15 year performance.
Robert Arnott founder of Research Affiliates studied 203 actively mutual funds tracking their returns for the 15 years from 1984-1998.Only 8 of these 203 funds actually beat the SP500 index!!!
Investing activity can be done by yourself Warren Buffet explained how his wealth has been created:''My wealth has come from a combination of living in America,some lucky genes and Compound Interest!! '' Once Albert Einstein called ''compounding'' one of the wonders of the world.It's well know that compounding over the long run do an amazing job.In his book Tony Robbins mention'' Theodore Johnson ''a UPS worker earned more than 14000 $/year he saved 20% plus every bonus and invested in his company by age 90 accumulated 70 mil/$ wealth!!!
In the end I recommed to everyone who wants to become financial free to read this book.
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