Investing Principles
When it comes to building and preserving wealth, four timeless principles have served me well.
Let me know if any of the principles below resonate with you.
“Compound interest is the eighth wonder of the world.”
The phrase is often attributed to Albert Einstein, although there is no evidence that he said it. For the past 42 years (save a couple of years in the middle when I was writing my book) I have been socking away money in a tax-deferred retirement plan. The compounding component of reinvested dividends and capital gains can add up – and how.
“Don’t look for the needle in the haystack. Just buy the haystack!”
This saying by Vanguard’s founder Jack Bogle underscores the wisdom of investing in broad-based, low-cost index funds and passively managed funds. It is one simple strategy that can help keep the odds on your side.
“Diversify and hope you are wrong.”
This phrase is attributed to Jean-Marie Eveillard, a renowned manager of the First Eagle Global Fund. I am especially fond of sharing this phrase with investors who have a concentrated position of a single stock in their portfolio. I embrace this phrase in my own personal portfolio.
“If you have already won the game, why continue to play?”
William Bernstein, a financial author and neurologist coined this phrase to emphasize the idea that once an investor has accumulated enough wealth to meet their financial goals, taking on additional risk is unnecessary. It is a reminder to shift focus from growing wealth to preserving it once you have reached your financial objectives.
Those are mine. Send me a message back and tell me yours!
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