| ← Back to Blog Home


One of the greatest myths of Wall Street is that you have to be complicated in approach to win the financial security game.  That statement, like much of what Wall Street would espouse, is lacking in veracity.  Or, in my old Minnesota vernacular, it’s a lie.

Like Steve Jobs of Apple would advocate, the beauty of things lies in their simplification.  There are really only five things a person has to do right to have a successful financial future.  Five; not more, not less.  They are;

  1. It seems obvious in retrospect, but if you don’t start here, there is no beginning so there can be no successful end.  We think, many people don’t save because they are intimated at the investment process and think ‘what’s the use; I’ll never be successful anyway’.  Not true Young Grasshopper.  We can actually help on the next 4 items…but you must start but you must start.
  2. Invest into an asset allocation that makes sense for you. There are really only two numbers here and they have to add up to 100% so the math is pretty easy.  How much do I want to own companies (also called stocks or equities) and how much do I want other people to owe me (also called bonds, or fixed income)?  Given that 93-98% of ALL the variation in investment returns can be attributed to the asset class they were invested in, you just have to get in the water. From there, as Warren Buffett has stated “a rising tide lifts all boats” (alternatively, he also said “when the tide goes out, we get to see who’s swimming naked”).
  3. Be diversified.  Put all your eggs in one basket, and things get broken easily.  Having 5-10 different asset classes is a pretty good common sense diversification.  NOTE: you’re invested in 30-34 asset classes, but we’re a little more sophisticated in your case here.
  4. Be disciplined; i.e. don’t react emotionally. When it’s time to sell your winners, sell them.  When everyone else says ‘things are really down’, you should be buying.  From volumes of research, an annual  and regimented rebalance of your asset classes brings about the right decision.  Sure, sometimes you could do better in Uncle Harry’s whispered hot tip, but most of the time you just get burned. As someone surely once said, the key to living a long life is not to get killed.  The same thing holds true for investments.
  5. Get the best investments. What does ‘best’ mean?  For us, it means get me investments that have the highest probability of success.  Why would anyone want an investment that has a low probability of success?  Passive investing is that approach, proven time and time again, so there actually isn’t a debate that holds intellectual water.  Further, you’ve got the most sophisticated form of a passive investments that we can find so you’re in exceptionally good shape here, but still Vanguard, Fidelity, etc. have moderately good second choices and far better than the Wall Street average.  Let Wall Street’s convulsing competitiveness (in some cases greed) work for you.  Take the frosting.

Those are the five items of financial success.  Simple.  Smart.  Effective.  That fact that they are also tax efficient is a wonderful by-product because that keeps more money in your pocket!

We want you to pass this information freely along to your kids, your associates and your friends.  Help them.  Doing it right means having options in life, and, to me, having options is the epitome of freedom.  If you think we could ever help anybody you care about to achieve those outcomes, always feel free to share our name.  We are passionately committed to helping people find financial independence in their lives, and never to be dependent upon their kids for that dignity.  Our children have enough challenges on their own.

See Also: