Step 9: “Now that you’ve got it, what are you going to do with it?”

Did you know that the majority of American’s have no cohesive or long-term investment plan?

I shouldn’t be surprised by this information, but the fact illustrates a huge need for the development of programs to help people understand safe ways to manage their capital and keep investment costs at a minimum.

Investment Education

Educating yourself about investment vehicles is one way to “dispel your fears about investing.” I spent about 3 years in the investment management world. 2 years as an intern at two major brokerage houses and 1 year earning money (well I should say spending my life energy) at one of the largest mutual fund companies in the U.S.

Step 9, in Your Money of Your Life, will “help you become knowledgeable and sophisticated about long-term income-producing investments” and manage “a safe, steady and sufficient income for the rest of your life.”
Empowerment

In essence, this book is about empowerment and Chapter 9 is a perfect closing. Understanding safe investment strategies is key to financial independence. The investment management tips offered in this chapter are not a comprehensive guide, but a starting point. The authors offer a plethora of book recommendations on investment management.

Also, these tools are not about making “killing in the market,” rather the suggested tools offered by the authors will help you provide for yourself in the long-run.

Educating yourself about investment options is a key part of this program, don’t leave this component to the “experts.” Why not? Well…

Brokers, financial planner’s, financial consultants, etc. are salespeople. They make money off commissions and fees. Mutual fund companies are notorious for charging lots and lots of fees. The profit you should be putting into your wallet goes to mutual fund companies and/or your broker.

3 Tips

The basic investment program that the author’s advocate is based on investing in the bond market and focuses on 3 things:

1. Capital: the sum that is invested in the safest possible long-term interest-bearing vehicles, ultimately producing at least as much income as indicated by the cross over point

2. Cushion: a cash reserve, in insured savings or interest-bearing checking accounts, that is enough to cover your expenses for 6 months. The purpose of the cushion is to handle emergencies and to smooth out cash needs to handle surges in expenses

3. Cache: your continuing savings habit made manifest.

After I left the financial world, I ignored it. So the RowdyKitten needs to brush up on the current bond market and fully implement the 3 strategies mentioned above…

For more on this topic see:

• Step 8: The Crossover Point
• Step 7: “For Love or Money”
• Step 6: “Living the American Dream on a Shoestring”
• Step 5: Is saving an impossible dream?
• Step 4: “How Much is Enough? The Nature of Fulfillment”
• Step 3: “Where is it all going?”
• Step 2: “Money ain’t what it used to be – and never was”
• Step 1: Your Money or your Life

Tagged as: life energy, money, Simple Living