Missiles launched? Sell everything? No, you should be buying right now

Aric Zamel

Ep 33Sep 11, 2022

Wealth Advisor Reveals Successful Investing Ideas

To sell and to be right, you got to be right twice... If you're an investor and you hold, you just have to be right once.
Aric Zamel

More moments · 6

He never made more than $14,000 a year and retired with $70 million

I watched the second plane hit, then a week later I was calling people to invest

The fund returned 10.8% a year but its average investor only got 4.8%

The day clients beg most to sell almost always marks the bottom

He made half a billion dollars and still went bankrupt

People spend thousands on a trust and it's literally sitting in their drawer

Try this · top 3

Quotes

“Financial freedom is really defined as having passive income that exceeds one's spending.”

Aric Zamel

“They overestimate the risk of holding securities and they underestimate the risk of not holding them.”

Aric Zamel

“Ours is the only business that I know of when things are on sale, when the market's down, people are running away.”

Aric Zamel

“Emotions usually make you do the wrong thing at the wrong time.”

Aric Zamel

“The most important factor in determining your long-term return is not performance, it's behavior.”

Aric Zamel

Takeaways

1 The rat race: earn more, upgrade your lifestyle, finance it with debt, keep working to pay the debt. The way out is to learn, save monthly, grow earnings and invest systematically.
2 The real risk is losing purchasing power. At 3% inflation you need about $2.45 in 30 years to buy what $1 buys today, and a stamp has gone from about 25 cents to 60.
3 Compounding: a UPS employee who never earned more than $14,000 a year put 20% into company stock and left over $70 million. $2,000 a month at 9% grows to about $1.2M in 20 years.
4 Tax-advantaged plans let the whole pre-tax dollar compound. In a roughly 50% bracket, a $100K contribution saves about $50K in tax that year.
5 Bear markets (down 20%+) come every 6.5-7 years. Buying every month turns them into a sale. The busiest panic calls usually mark the bottom within a day or a week.
6 Investor behavior decides results: one S&P fund returned 10.8% a year over 20 years while its average investor earned about 4.8%.
7 The three big mistakes: timing the market, being undiversified and chasing performance. The Gemara's advice to split money a third in land, a third in business and a third on hand points to diversifying.
8 An advisor is a quarterback: tax-advantaged plans, borrowing against a portfolio (often at half the rate of property loans), and estate planning. Estates above about $12M per person paid roughly 40% tax, due within 9 months.
9 Retirement rule of thumb: hold 20-25 times the yearly income you'll need beyond Social Security and pensions.
10 It's never too late to start - at 45 you'll wish you had started at 40. Invest in what you understand, and be wary of family deals.

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