Live It Up Without Outliving Your Money! E-Book

Paul Merriman

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

Veröffentlichungsjahr: 2010

Beschreibung

Completely expanded and updated, Live it Up Without Outliving Your Money! Second Edition is the financial roadmap that people are looking for. Based on the author's experience in the financial services sector since the mid-1960s, including more than 30 years as an investment advisor and money manager, this plain-talking book gives readers simple strategies to add between $1,000 and $10,000 to their monthly income in retirement, and without taking any of the dumb risks of the past.

This reliable resource motivates readers to take the first steps to change their financial situation; presents multiple strategies for withdrawing money during retirement; and exposes the marketing tricks perpetrated by financial institutions. This book also includes added focus on newer issues such as ETFs, REITs, estate planning, IRA withdrawals, and updated allocation strategies.

Live it Up Without Outliving Your Money! :

• Allows readers to tailor a financial plan for retirement that takes into account the amount of risk they’re willing to tolerate

• Provides multiple strategies for withdrawing money once in retirement while also building an estate for children and other survivors

• Exposes the marketing tricks and emotional ploys perpetrated by financial institutions and the personal finance media that keep investors from making the best decisions – and provide real-world examples of these deceptions

• Motivates readers to take the first steps to change their financial situation, which is the most difficult part of the strategy

• Includes a dozen worksheets to help readers grapple with retirement planning

Leseprobe

Table of Contents

Title Page

Copyright Page

Acknowledgments

Introduction

Ten Steps to an Ideal Retirement Portfolio

A Note to the Reader

CHAPTER 1 - Why Investors Fail

Mistake 1: No Written Plan

Mistake 2: Procrastination

Mistake 3: Taking Too Much Risk

Mistake 4: Taking Too Little Risk

Mistake 5: Trusting Institutions

Mistake 6: Believing the Media

Mistake 7: Failing to Take Small Steps That Can Make Big Differences

Mistake 8: Buying Illiquid Financial Products

Mistake 9: Requiring Perfection in Order to Be Satisfied

Mistake 10: Accepting Investment Advice and Referrals from Amateurs

Mistake 11: Letting Emotions Drive Investment Decisions

Mistake 12: Putting Too Much Faith in Short-Term Performance

Mistake 13: Overconfidence

Mistake 14: Focusing on the Wrong Things

Mistake 15: Needing Proof before Making a Decision

Mistake 16: Not Knowing How to Deal with the First 15 Mistakes

CHAPTER 2 - Stress versus Success

George: Doing It Right

Roger: Where Did He Go Wrong?

CHAPTER 3 - Lessons from Smart People

Smart Step 1

Smart Step 2

Smart Step 3

Smart Step 4

Smart Step 5

Smart Step 6

Smart Step 7

Smart Step 8

Smart Step 9

Smart Step 10

Smart Step 11

Smart Step 12

CHAPTER 4 - The Psychology of Successful Investing

Cruising the Investment Highway

Your Style in the Driver’s Seat

Watch Out for Your Expectations

Your Goals Should Be Good

Watch Out for Wall Street

Watch Out for the Media

The Two Lists

The Answer

CHAPTER 5 - Who Are You and What Are Your Goals?

CHAPTER 6 - Your Ideal Portfolio

CHAPTER 7 - Profit from Real Estate and Small Companies

How Reliable Is the Premium from Small-Cap Stocks?

CHAPTER 8 - Value

CHAPTER 9 - Putting the World to Work for You

CHAPTER 10 - Controlling Risks

Balancing Risk and Return, 1970-2007

CHAPTER 11 - Meet Your Enemies

CHAPTER 12 - Putting Your Ideal Portfolio to Work

Further Resources

CHAPTER 13 - Withdrawals

CHAPTER 14 - Hiring an Investment Adviser

CHAPTER 15 - Your Action Plan

CHAPTER 16 - My 500-Year Plan

APPENDIX A - Ten Lessons I Learned from John Bogle

APPENDIX B - Resources

Disclaimer and Legal Information

Index

Copyright © 2008 by Paul Merriman. All rights reserved.

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

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, [phone], fax [phone], or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, [phone], fax [phone], or online at http://www.wiley.com/go/permissions.

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:

Merriman, Paul A., 1943 -

p. cm.

Includes index.

ISBN 978-0-470-22650-6 (cloth)

1. Finance, Personal. 2. Investments. 3. Financial security. 4. Retirement income—Planning. I. Title. II. Title: 10 steps to a perfect retirement portfolio. III. Title: Ten steps to a perfect retirement portfolio.

HG179.M432 2008

332.024’014—dc22

2008006122

Acknowledgments

No duty is more urgent than giving thanks.

—St. Ambrose

I could not have written this book—and I could not do the work that I do—without the fabulous support I receive from many people who have generously given their time, talent, wisdom, and encouragement. I have the good fortune to have wonderful close working partnerships with several very talented people.

Tom Cock Jr. helps me reach hundreds of thousands of readers and listeners. He is my co-host on Sound Investing, our weekly radio show, and creator of Soundlnvesting.com, where those broadcasts are available online. Tom, former host of the weekly PBS series Serious Money, also is my partner in designing and leading our educational workshops.

I could write a whole chapter on the many ways my life is enriched by my son, Jeff Merriman-Cohen. Jeff is my boss, as chief executive officer of our company, freeing me to concentrate on what I do best. Jeff is a superb financial adviser, an excellent manager, and a pleasure to work with in every way. Perhaps best of all (and very rare), my son is a full partner and a true friend. Every father should be so lucky!

Every part of this book reflects the writing skills of Richard Buck, managing editor of FundAdvice.com. Rich spent 20 years as a Seattle Times business reporter, and all that experience shows. Rich and I have great fun together generating and developing articles. Since 1993 he has been transforming my ideas into interesting, easy reading that has helped thousands of investors.

I am greatly indebted also to Dennis Tilley, who for many years was director of my company’s research department. Dennis is literally a former rocket scientist who combines an amazing skill set with a passion for finding ways to improve investor returns. His work is woven throughout this book. Larry Katz, our very talented director of research, produced most of the updated tables in this book. Hang Nguyen, the third member of our research department, created an extremely important part of the book, our suggested fund portfolios.

Over the years, many people have helped me get my message out to investors. I am indebted to Craig Tolliver, who invited me to write a weekly column at CBSMarketWatch.com (now DowJonesMarketWatch .com); to Ken and Daria Dolan, who invited me to be a guest on their nationally syndicated radio and television shows; to Paul Kangas of Nightly Business Report; Humberto Cruz, a syndicated newspaper columnist; and Paul Farrell, a writer at DowJonesMarketWatch who shares my commitment to helping investors distinguish between what I call “investment pornography” and legitimate advice.

Bill Donoghue introduced me to thousands of investors at his Donoghue Mutual Fund Superstars conferences; Kim and Charles Githler of Intershow did the same with their wonderful Money Shows across the country. Wayne Baxmann of the American Association of Individual Investors has made it possible for me to speak at dozens of AAII chapters.

From Dan Wheeler, Bo Cornell, Eugene Fama, and Kenneth French I have learned the power of putting together world-class investments using what I believe are the best mutual funds on the planet. Every reader who follows my advice in Chapters 6 through 10 is also indebted to these individuals.

Finally, I must mention two very special people in my life: Thaddeus Spratlen and Dr. Lynn Staheli. They have inspired me to realize that I don’t ever want to retire, because I’m simply having too much fun and there’s too much still to be done.

Thaddeus, professor emeritus at the University of Washington, was one of my teachers long ago and has been a friend for 40 years. He spent decades as a professor preparing students for successful careers. He’s devoting his “retirement” years to the Business and Economic Development Program through which the University of Washington Business School and Seattle Rotary put students and experienced business professionals together to help small businesses in Seattle’s inner city.

Lynn, a retired physician from Children’s Hospital in Seattle, started Global-HELP (global-help.org), a nonpolitical, humanitarian agency that distributes free publications to medical professionals in developing countries. I’m proud to be a founding member of this organization’s board.

My highest aspiration in life is to be like Thaddeus and Lynn.

Introduction

WHY I WROTE THIS BOOK

I am not a teacher but an awakener.

—Robert Frost

This book is designed in part to help investors protect themselves from Wall Street practices that I saw firsthand many years ago. Fresh out of college in the 1960s, I became a broker for a large Wall Street firm. Training classes in New York quickly taught me the priorities that should dominate my working day.

I guess I was naive and too idealistic for Wall Street. I had looked forward to helping people with their money. It didn’t take long to learn that Wall Street had only one high-priority objective: sell.

Sales, of course, required trading activity. Gradually, I realized Wall Street was infected with an attitude that didn’t seem right to me: If the clients were content, they weren’t doing the firm any good. No matter what the clients had done, it was the broker’s job to persuade them to do something else.

Ideally, that “something else” involved buying proprietary products on which the big brokerage houses earned unusually high commissions. Sometimes brokers were offered incentives such as free trips. In most cases, the commissions and the cost of the trips were built into the price of the products. This allowed brokers to tell clients they could buy these products without paying any commission. The clients thought they were getting a special deal. We knew otherwise: They were being exploited.

I’ll admit the sophisticated world of New York City held quite an allure to a young man from Wenatchee, Washington. Wall Street made the job fun, and it seemed as if there was lots of money to be made easily. But it didn’t take me long to grow weary of a job that, I came to realize, was designed essentially to separate people from their money with little thought given to whether these people were getting something valuable in return.