How To Really Ruin Your Financial Life and Portfolio E-Book

Ben Stein

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch
• Veröffentlichungsjahr: 2012

Seitenzahl: 116

Beschreibung

Hilarious advice on what NOT to do with money, from financial funny man Ben Stein Everyone's searching for the secrets to financial success, but what about the best ways to lose money . . . fast?! In How To Really Ruin Your Financial Life and Portfolio, bestselling author, economist, financial commentator, and media personality Ben Stein explains exactly what to do . . . to go bust! The ultimate "how-NOT-to" guide, the book gives readers invaluable tips that should be avoided at all costs. Written in Stein's own inimitable style, this hilarious guide provides essential financial advice on what not to do when it comes to managing money. From reading and acting upon investing newsletters to trading on a margin, from investing in bonds to breathlessly following CNBC, and from buying stock in firms you do not understand to believing in your own genius at stock picking to keeping as little cash on hand as possible, Stein presents the rules that every would-be investor needs to know, so they can do the exact opposite and actually make money. Fully revised and updated, this new edition presents all-new missteps that can destroy any portfolio. * Fully revised and updated edition of the tongue-in-cheek bestseller that shows investors what not to do with their money * Written by acclaimed author economist, financial commentator, and media personality Ben Stein * Loaded with indispensable pieces of bad advice that readers should avoid at all costs A laugh-out-loud approach to personal finance, How To Really Ruin Your Financial Life and Portfolio is an accessible guide to money from the funniest man in finance.

Leseprobe

Contents

Acknowledgments

Introduction

Chapter 1: Trade Frequently

Chapter 2: Trade Foreign Exchange

Chapter 3: Believe in Your Heart That You Can Pick Stocks

Chapter 4: Assume That Recent Trends Will Continue Indefinitely

Chapter 5: Pour Continuer . . . Sell When Things Look Bleak . . . and Stay the Heck Out of the Market

Chapter 6: Know in Your Heart That This Time It’s Different . . . and Act on It

Chapter 7: Dividends Are for Spending—Not Investing—Just Ignore Them or Use Them to Buy Baubles

Chapter 8: Cash Is Garbage—Except When It’s Not

Chapter 9: Put Your Money into a Hedge Fund

Chapter 10: Try Strategies That No One Else Has Ever Thought of . . . You Can Out-Think the Market

Chapter 11: Use the Strategies That University Endowments and the Giant Players Use

Chapter 12: Commodities Are Calling . . . Will You Answer the Phone?: Everything That Happens in Your Life Involves Commodities

Chapter 13: Go on Margin for Everything

Chapter 14: Sell Short

Chapter 15: Do Not Have a Plan for Your Investing or for Your Financial Life Generally

Chapter 16: Do It All Yourself

Chapter 17: Pay No Attention at All to Taxes

Chapter 18: Believe That Those People You See on TV Can Actually Tell the Future

Chapter 19: Do Not Start Even Thinking about Any of This until the Absolutely Last Moment

Chapter 20: Don’t Believe That Any of This Matters Very Much, This Money Stuff

Chapter 21–49: How to Ruin Your Greatest Asset—You

Choose a Career with No Possibility of Advancement

Choose a Career with Little Chance for a Good Income

Choose Lots of Education over Lots of Pay

Show No Respect for Your Boss or Fellow Workers

Don’t Learn Much about Your Job, Industry, or Employers . . . Just Wing It

Do the Minimum Just to Get By

Show Up in Torn Jeans, Unshaven, Unwashed, Any Old Way You Feel Like Showing Up

Show No Regard for the Truth

Display Open Contempt for Your Job, Your Fellow Workers, Your Boss, and Your Clients/Customers

Act Like You Are Morally Superior to Your Job and Your Colleagues

Do Not Be Punctual

Don’t Hesitate to Have a Cocktail or Two at Lunch

Gossip and Sow Divisiveness at Work

Second-Guess Everyone around You at Work, Especially Your Boss

Threaten Your Boss and Employer with Litigation

Look for Grievances at Work

Make Sexual Advances to Anyone You Find Attractive

Make Excessive Phone Calls, Texts, and E-Mails on Company Time

Play Video Games at Work and Make Loud Noises as You Do

Make and Keep Lots of Personal Appointments on Company Time

Listen to Your Colleagues’ Conversations and Snoop on Their E-Mails

Talk about How Much Better Earlier Employers Were Than Your Current Employer

Brag about Your Great Family Connections

Pad Your Expense Account

Borrow Money from Your Fellow Employees and Don’t Pay It Back

Question, Mock, and Belittle Your Tasks

Flirt with Your Colleagues’ Significant Others

Proselytize at Work and Belittle Anyone Who Doesn’t Share Your Political or Religious Beliefs

Say Anything You Want That Comes into Your Head

About the Author

Copyright © 2012 by Ben Stein. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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Library of Congress Cataloging-in-Publication Data:

Stein, Benjamin, 1944- author.

How to really ruin your financial life and portfolio / Ben Stein.

pages cm

ISBN 978–1–118–33873–5 (cloth); ISBN 978–1–118–46148–8 (ebk); ISBN 978–1–118–46145–7 (ebk); ISBN 978–1–118–46146–4 (ebk)

1. Portfolio management. 2. Investments. 3. Finance, Personal. I. Title.

HG4529.5.S717 2012

332.024—dc23

2012020166

FOR BIG WIFEY+

Acknowledgments

The first person I knew who was interested in investing was my mother. She had little training in it, but read Barron’s, The Wall Street Journal, and Forbes voraciously. When she died, she left my sister and me a pretty darned good portfolio. She also left me with two fine admonitions: “Buy on the rumor and sell on the news,” and, “Bulls make money and bears make money, but hogs get slaughtered.” I am not quite sure what either of these mean in practical terms to the long-term, index-oriented investor, but they must mean something because my mother did leave a good portfolio.

My father, a famous economist, was the least interested in money of any man I have ever met, yet he had some excellent wisdom about money. Almost all of it could have been summed up under the simple heading: “Be prudent.” I rarely have been since he died in 1999, to my great cost.

My sister, far and away the most prudent Stein now living, and her equally prudent husband, Melvin, have often advised prudence upon me and I thank her and him. My first genius investor mentor was my first agent in Hollywood, George Diskant. His predictions about the economy were not always borne out, but he told me about BRK and that was worth plenty.

Other great influences were my spectacularly good money and banking teacher at Columbia, C. Lowell Harriss, and my superb econ teachers at Yale, Henry Wallich and James Tobin, inventor of “the Fed model” and “Tobin’s Q”, both designed to tell when the stock market is overvalued and when it is undervalued. Neither seems to have had much predictive value in recent years, but they are certainly correct in general direction.

It has been my great pleasure in the last 25 years to have had a great broker at Merrill Lynch in Kevin Hanley, and more lately in his brilliant colleague, Jerry Au. I have also been privileged to get a general introduction to the erudition of John Bogle. I keep a lot of my stash at Fidelity. I have also made the acquaintance of Ned Johnson and his lovely daughter, Abigail. The Johnsons and their company have done me much good. The Johnsons and John Bogle truly are the small investor’s best friends.

For about the last 10 years, I have been a pal and frequent dinner and speaking companion of Ray Lucia, a stunningly well-informed and articulate investment advisor (now retired). I have learned a huge amount from Ray and his brother Joe, whom I consider my own brothers.

If there is anyone smarter in speculation that Jim Rogers, and quicker to see what’s happening, I don’t know who that would be (unless it’s Warren Buffett.) I was on a show with him on Fox for many years and always learned from him and still do. The whole gang on that show, especially host Neil Cavuto, always challenge and impress me.

By an extraordinary twist of fate, I have become pals in the last several years with Warren E. Buffett, surely the greatest genius in investing and in life generally. He is light years ahead of where I will ever be, but he has inspired me and years of reading his annual reports have sparked some kindling in my woolly brain.

Finally, my closest friend, Phil DeMuth, has spent countless hours doing research on investing, often on vague lines I have suggested to him, but usually on his own thoughts. We talk of little else but investing, and it is always useful. Few men that I know have as good a friend as Phil and I am grateful.

Well, maybe that wasn’t final. . . . The real acknowledgment is to life its own self. Life has flattened me so many times, lifted me up and laid me down low, given me a wildly false sense of security, then showed me who was boss, taught me so much fear and humility that I felt compelled to offer the lessons in this little book to those younger than I am. “Experience keeps a dear [meaning ‘expensive’] school,” said Ben Franklin, “but a fool will learn in no other.”

I am that fool—but like many a fool at a King’s Court, I have seen plenty and can share it. Maybe it can all be summed up by what my Pop said: “Be prudent.” But what is prudent? Maybe some idea of it can be gleaned from this book.

Introduction

Your basic human is not a great investor. Successful investing requires extreme patience; we humans are impatient. Rewarding investing requires nerves of steel—or else perfect forgetfulness; we humans are frightened, nervous animals. Making money by investing requires singleness of purpose; we humans are scattered and distracted, pulled in all directions at once. The great investors carefully think through their moves, guided by eons of experience; we real-life human being investors are rash, impulsive gamblers.

Great investors are not swayed by fads and fancies. The ones with two feet and receding hair are wills-o’-the-wisp, blown all about by what is happening at the moment.

The ones who make money over their lifetimes are steadfast of purpose, well informed, listen to wise guidance, reject counsels of impatience and despair. The real-life investor gobbles up misinformation, listens to fools and knaves, and gyrates wildly in his actions, almost always against his own best interest.

I know all of this. I have seen it in my own life on many an occasion. I have seen it in the lives of men and women I know, even supersmart men and women. They make extraordinary mistakes that cost them real money.

Educations are imperiled. Retirements are jeopardized or lost. All of that comes from making poor investment decisions.

Investors do not do the wrong thing because they want to lose money. They do the wrong thing because they are, well, human. And humans are simply constructed of fear and greed and confusion, while great investors are made up of sterner stuff.

Investing involves making money, or trying to do so. There are billions, trillions of words out there written about how to invest wisely. There are far more than I know about. Among those I do know about, I highly recommend anything by my pal Phil DeMuth, or by Warren Buffett, or by John Bogle, the founder of Vanguard, the world standard in low-cost index investing, a simply great way to invest. John Bogle on Investing is as good a book as there is on the subject. If you had to read only one book, this would probably be your choice.

There are so many hopelessly confused books about investing out there it would be impossible to know where to begin listing them, and why bother?

Unfortunately, investing also involves people throwing around their money and putting it in a place where other people can take it away from them. This is a bit like the comment often credited to P. T. Barnum: “There’s a sucker born every minute—and two to take him.”

Very unfortunately, those two are often lawyers, but even more often, they are in the world of investments. The variety of ways and means by which people can relieve other people of their money is breathtakingly infinite. Newsletters. Conferences. Software. Expensive kinds of investment guidance, sometimes called hedge funds, other times called other names.

Often these schemes are run by men who genuinely want to help the investor and truly do. It is far from true that everyone who handles your money is a thief, and I have the great pleasure of working frequently with men and women who do a great job protecting their clients.

But there are more than enough people out there who, through all kinds of motives, but mostly out of all-too-human self-interest, will not have much hesitation in deciding between their interest and yours.

My late father, Herbert Stein, an extremely smart man and a world famous economist, devised what he called Milken’s Law, which, he believed, often explained investment options presented to the public by promoters. It went as follows: The constant ME is always greater than the variable U.

It is sad but it’s true.

Over the last many years, your humble servant, moi