Investing Principles

Barry Ritholz interviews financial stars on his podcast and is a font of knowledge on investing in this article, Ten Simple Money Rules for Investing Success.

• Investing is both simple and hard
• Behavior is everything
• Moderation in all things
• Risk and reward are inseparable
• Spend less than you earn
• Leverage kills
• Understand your role

Ray Dalio's Principles

TIP, The Investors Podcast, We Study Billionaires reviewed Ray Dalio's book, Principles, and a major take away they got from the book was Ray's 3 C's for hiring: Character, Common Sense, Creativity.

Millionaire Next Door

One of the first financial books I ever read was "The Millionaire Next Door". The book investigates the characteristics common to American millionaires, and it debunks the idea that millionaires are free spending playboys. Millionaires build wealth by maximizing their income and not spending more than they make. This book demystifies the traits of millionaires and how to become one. Amazon: https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474

Earnings Call App

Every quarter companies release a quarterly or annual report, and executives discuss the quarter will Wall Street analysts. Public companies often link to the call on the investor relations section of their website. if you own many stocks it can be time consuming to track down all these links. Borsa has a great iphone app that pulls together all of these earnings calls into one place: Link. It has a simple interface that makes it easy to find an recent earnings call of most companies.

Investing Start

How to get started investing money? 1. Create an emergency fund 2. Pay off credit card or high interest debt 3. Maximize retirement accounts 4. Reduce spending 5. Invest in VOO or SPY in a taxable stock account 6. Invest in individual stocks

S&P 500 Entrance Requirements

S&P 500 index funds have been some of the best performing stock ETFs and the individual stocks that make up the index are incredibly desirable investments for most investors. Getting into this elite group isn't easy, Tesla became one of the largest publicly traded stocks before getting in. Market capitalization isn't the only criterion for acceptance by the committee that picks the approximately 500 stocks. One of the criteria keeping Tesla out was the requirement for a year of profitability, since Tesla was unprofitable for many years. S&P 500 also only accepts stocks that trade on US stock markets with sufficient trading volume. There are a number of other minor requirements related to corporate governance and stock share types.

Trinity Retirement Study

 In February 1998, a group of researchers at Trinity College released a study of the safe withdrawal rate (SWR) for retirees. Instead of focusing on income generating investments like dividend paying stocks, real estate, and fixed income, the study considers how the total return of a portfolio of stocks and bonds can support a fixed withdrawal rate over a long period of time. If over that time period the portfolio balance doesn’t go to zero, it is considered safe. Using past histories of returns and inflation a 4% withdrawal rate is prudent with more stocks in the portfolio. An all stock portfolio can support a higher withdrawal rate, but with a lower probability of success.

Retirees don't need to consider only income producing assets for retirement. With an appropriate SWR, the capital gains of stocks and bonds yield income for retirement.