Wednesday, January 14, 2015

Are you making this mistake with your money?



This is another money topic that I wanted to share with all of you. Take it for what it's worth. Hope it helps.

I've been reading (and listening to) Tony Robbins's new book, Money: Master the Game. I am a huge fan of Tony Robbins and I strongly recommend this new book simply because he boils down what you need to do NOW with your money so that you have some LATER in life. 

And so we can all have some fun, too. :)

Three of the biggest take-aways from the book:

1. Save money. You'll need it later. Not saving any money? Start now.

2. The most important money decision is asset allocation. 

What does this mean? Where are you putting your money? Is it safe? Diversified? Risk averse? Maybe like some you're out of whack.

In Tony speak: "DIversify or Die." :) 

There are several very good chapters on this topic and even actual examples from some of the biggest money managers in the world whose allocations you can copy for free. FOR FREE. There is also a link to Stronghold Financial where you can have any savings/investments/retirement account analyzed, again for free.

3. You are probably paying WAY TOO much in fees. 

Say that again: WAYTOOMUCHINFEES

Mostly from hidden mutual fund fees. In your 401K, IRA, 529s, Etc

Tony will scare you into action as he tells several stories to illustrate his point. One from John Bogle (founder of Vanguard) spells it out perfectly. 

It goes like this:

With a $10K investment at age 20 with annual growth of 7% you would have $574K at age 80. But, if you paid 2.5% in fees you'd end up with $140K.

There are tons of examples like this. The basic solution: asset allocation using index funds from Vanguard. (I'm a huge fan of these).


I welcome your comments below or feel free to contact me at paul@crimetravelers.com 

I study money math a lot. The antagonist in my kid book series, Crime Travelers, is the CEO of the Good Company (Yes, they're not good! :)
Post a Comment