Wealth in Words

Warren Buffett and Bill Gates have referred to this individual as the smartest man they know. He may be best known for his book of witty remarks and sage advice called “Poor Charlie’s Almanac.” Of course, I am alluding to Charlie Munger. Munger is the long-time business partner of Warren Buffett . Together, this team has grown their conglomerate, Berkshire Hathaway, into one of the world’s most respected businesses. Below are some observations from “Charlie Munger: The Complete Investor” that should help you in your own financial , professional  and entrepreneurial journey . Solve Hard Problems by Using a Checklist Munger is a proponent for using checklists  to get your most important tasks done. He states that “I’m a great believer in solving hard problems by using a checklist. You need to get all the likely and unlikely answers before you; otherwise it’s easy to miss something important.” Similarly, Buffett has said that “if you haven’t written it down, you ...

There are certain activities that all successful entrepreneurs do very well. While writing The Creator’s Code , Susan Wilkinson uncovered six commonalities shared by founders of some of the most recognizable brands. Though interesting in this context, these traits are not limited to building a profitable business. Parallels can be drawn into your personal finances as well. Find the Gap – See opportunities that others don’t see. Finding the best investment opportunities often requires doing things a little bit differently. For example, Warren Buffett has advised that we “be greedy when others are fearful and fearful when others are greedy.” Markets move in cycles . Learn the basics for why prices go up and down. Then you will be able to find investment opportunities that others are missing .  Drive for Daylight – Top-level entrepreneurs focus on the future. Wilkinson notes that “researchers at the University of Chicago found that people who ar...

Every day we face a barrage of stimuli from the world around us. If we are not careful, these distractions can keep us from reaching our goals. When you focus equally on essential as well as non-essential tasks, nothing gets done. Think of it like a race car team preparing a car before an important race. There are countless tasks that could be done in the limited hours beforehand but ultimately the o nly thing that matters is doing the tasks necessary to get the car across the finish line. When it comes to steering your money and finances in the right direction, make time to decide which vital functions you must address right now to make improvements this year.  These vital factors are your most obvious or urgent needs. For example, paying down credit card debt, student loans, car loan, creating a budget , building a savings account , or starting investing  could be one of your top three financial priorities. Begin to focus all your effort on improving these t...

“Someone is sitting in the shade today because someone else planted a tree a long time ago.” – Warren Buffett When it comes to conquering the challenge of living financially free you must make saving a priority. In other words, it is essential that you create excess cash reserves to put toward paying down your debts and investing in your future. This can be accomplished through earning more income or, more immediately, by putting a plan in place to minimize expenses. Jim Rohn has a simple formula  for savings that can be used effectively to start growing your reserves. As a result, focusing on saving will train your mind to think about abundance. Focus on all the things you can do with what you have right now. Remember, the more you save the more you will be able to invest and, in turn, you will be able to exploit compounding of interest . Putting your money to work for you is a key element in your quest to acquiring wealth . “The rich invest their money and spend what...

In the world of investing Blue Chips are known as large, financially established companies with generally attractive stock prospects. Think of iconic American brands like Disney, Walmart, General Electric, Intel, or Visa. In fact, all thirty of the constituents of the Dow Jones Industrial Average can be considered good examples of Blue Chips. Given the financial well-being of Blue Chip companies, they often pay a tasty dividend that can be just as pleasing to your portfolio as those corn tortilla Blue Chips are to your palette. All joking aside, since Blue Chips are well-established financially they generate excess cash that can be returned to shareholders in the form of a dividend. In some cases, the dividend payment and persistent growth in payouts is the best reason for owning one of these stocks. Furthermore, dividend-rich companies can be used as an alternative to comparable fixed income products in a low interest rate environment. In addition to the stream of divid...

The Robo-Advisor concept is relatively new to the mainstream investment crowd. The product is applicable across many demographics spanning different age, wealth, income, and financial goal categories. In essence, Robo-Advisors are to the advisory business what ETF’s are to the fund business.* In other words, the product is a disruption to the traditional asset management industry and is worthy of consideration for your investment plan. To begin, a Robo-Advisor is a passive investment management strategy that employs ETF’s to build a portfolio based on Modern Portfolio Theory (MPT). MPT originated from the research of Harry Markowitz. His paper’s premise suggest that investors can tailor a portfolio of investments based on their risk tolerance, therefore implying that assuming some risk is an inevitable part of investing. While risk is inevitable, that risk can be mitigated through diversifying one’s holdings in a portfolio. Markowitz’s work implies that building an efficient portf...