Investing

First published in the early 1970s, in the Dow Theory Letters and updated in 2014. A 12-point checklist for the perfect business. Some Highlights. The ideal business... (2) offers a product which enjoys an "inelastic" demand. Inelastic refers to a product that people need or…

The 4% rule, broad-based stock indices, how to think about money and investing to build wealth, how to avoid debt, what the stock market really is and how it really works, How to invest in a raging bull, or bear, market, and specific investments to…

Morgan Housel on Getting Rich vs Staying Rich. Some highlights... Everything in the economy is cyclical. Nothing great or terrible is likely to stay that way for long, because the same forces that cause things to be great or terrible also plant the seeds to…

Someone who saves and invests $10,000 each year at a 7% interest rate will accumulate $100k in 7.84 years. Out of this $100k, 78% of it will be composed purely of savings. The other 22% will be composed of investment returns.

If Total Assets * Expected Annual Return > Expected Savings this means your investments are earning you more than you are saving, so you should focus on your investments. However, if you can feasible save more than your assets can earn you in a year,…

Past a certain level of income, what you need is just what sits below your ego. Everyone needs the basics, and once the basics are covered there’s another level of comfortable basics, and past that there’s basics that are both comfortable, entertaining, and enlightening. But…

An unconventional approach to economics that helped Ray Dalio anticipate (and side-step) the global financial crisis. When you understand that the economy is nothing more than the accumulation of all human transactions, it becomes fractal. Dalio explains the economy in terms of 3 forces – Productivity Growth,…

Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth. Status is your place in the social hierarchy.

I don’t know how the market will perform this year. I don’t know how the market will perform next year. I don’t know if stocks will be higher or lower in five years. Indeed, even though the probabilities favor a positive outcome, I don’t know…

Wealthy people claim they don’t think much about money. That’s bullshit; they are obsessed with money. The notion that rich people don’t think about money is an attempt to dampen resentment (e.g., revolution) from the 3.5B people who have fewer assets than the wealthiest 12…