Investment Diary #22: Generating personal lifetime income

I recently went through the book Money: 7 steps to create lifelong income and these are the core things I learned

The mystery of investing 🔗︎

• Remember, figuring it out means knowing what the exact number is, and figuring it out gives you power.

• The correct approach to investing should be to look for asymmetric risk-return opportunities; if you take the risk that you might lose a dollar, your possible return opportunity must be to be able to make at least five dollars

• There is a magic mantra: diversify, diversify, or diversify. Effective diversification not only reduces your risk, but provides the opportunity to maximize your returns. Dalio’s All Weather Portfolio utilizes diversification, as well as David Swenson’s endowment fund investment model, which divides the portfolio into five to six roughly equal parts, each invested in a different asset type. The Yale investment model is a long-term investment strategy that prefers a very broad range of diversification, with a preference for equity investments and less emphasis on lower-yielding asset types, such as bonds or commodities.

• Buying stocks today and selling them tomorrow may not beat bonds, nor may buying this week and selling next week, nor may buying this year and selling next year.

• Test how deep the river is, never put both feet in it

• Always invest in real estate or REITs

• It’s not what you buy that’s important, it’s what you pay for the thing that matters

• If you ask better questions, you’ll get better answers.

• By holding a portfolio of half stocks and half bonds, you’re actually letting that half take 95% of the risk of the entire portfolio! There have been 40 years, of which the S&P 500 has been down in 9 of them, a cumulative decline of 134%! Bonds (represented by the Berkeley Bond Index) were down for only three of those years, with a cumulative loss of only 6%, so if you hold a portfolio of 50% stocks to 50% bonds, the S&P 500, which represents stocks, is responsible for 95% of your overall losses.

• Those pension losses could cost you what you’ve been saving for your entire life. So the need for annuities.

The secret to success is to be worthy 🔗︎

• Strive not only to be a successful person, but to be a valuable one. – Albert Einstein. What is the secret to being financially successful? The key is to understand how you can become more valuable in the marketplace." “To have more, you must accomplish more.”

• “Don’t expect things to be easy, expect yourself to be better.” “To change things, you have to change yourself first.” “To make things better, you have to make yourself better first.” We get paid because we bring value to the market. It takes time …… but we don’t get paid for time, we get paid for value. "

• Learn to be a servant to everyone, to lead the people you have to serve them first. Then you will be able to make more money. You’ll be able to find ways to serve millions of people and you’ll be able to make more money. To add value to yourself, first add value to others.

Find the problem 🔗︎

• Don’t stop growing, don’t stop giving, work on expanding your influence, expanding your ability to give more, to do more good

• Problems are everywhere, solutions are everywhere, if you look for them.

The secret to being worthy and happy is to love, to focus 🔗︎

• Go find out what things you love to do and what things you’re good at. Find that thing that you love to do and you’re good at and give it your all, and it will bring a great deal of fulfillment to your life. This is the secret to happiness.

• Focus on what I can control. I can improve myself; I can find ways to serve others, do more, become better, and add more value to the market. I become obsessed with one thing, finding ways to do more for others, more than anyone else, and in less time! It’s a process of continuous improvement, continuous enhancement that never ends! In essence, it became my pathway to continuous improvement, and it continues to drive me and guide me in every decision I make and every action I take.

• If you find ways to add value, then your income moves in one direction, and that’s ever up, and up again

Having value is the key to solving unemployment 🔗︎

• For those who make $100,000 a year or more, guess what their unemployment rate is? The answer is less than 1%.

• Have a set of skills that are desperately needed in the marketplace right now, and you can continue to improve and become more valuable, and someone will hire you, or you can start your own business, and you’ll have a job no matter what the economy is like. If you’re the one who hires yourself, the more valuable you are, the more you’ll earn, because all the money you make is yours.

• The jobs are out there, but you need to learn and reorganize your skill set in order to have those skills that these jobs require in order for us to become more valuable in the new marketplace

• You can increase your earning potential, everyone can. You can add value to the market, you can learn new skills, you can change the way you think about yourself

• But if your job becomes obsolete in another 5-10 years, now is the time to think about transitioning and trying something new. Transformation is Silicon Valley speak for.

• Self-education, where you can make $100,000 to millions of dollars a year without having to quit your job, or without having to spend a ton of money and 4 years of your life just to get a college undergraduate degree (which will leave you with $100,000 or more in debt)

• For those things that need to change, you have to change. For the things that need to get better, you have to make it

• It’s never our work that really limits our income level, it’s our creativity, our focus, our contribution

• Redouble your efforts to improve yourself and your teaching skills.

• Only three hours were spent lecturing. The remaining 57 hours he spent researching, innovating, developing courses that

• The market will always tell you how much you’re really worth. Money doesn’t lie.

• Business is not about making money, it’s about what advantage or value you can provide that determines whether or not to do a particular business.

• Never lose any client at random.

The real failure is being afraid to try 🔗︎

• Defined failure is not failing to achieve a result, it’s being afraid to try. Ask yourself once a day, “Have you failed today?”

• Reread it again and absorb the essence of it. Remember, repetition is the mother of skill. It is only through action that all your power can be found.

• Remember, knowing is not power, executing is power.