How To Invest

Wade is on Facebook Davis, there is a book on mutual funds for dummies that you would recommend. The best

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ing book we have is Chris Hogan's retirement-inspired book and I would highly recommend it. It's a number one bestseller and goes into Very good detail, you can always look for more, but it depends on how much you want to analyze the process. I don't know of any book other than that that goes into the absolute nerd-level breakdown of mutual funds. Teach the details about it. I will tell you what I have learned over the years having

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ed for 30 years, now 35 years, is that the vast majority of the money you make in mutual funds is number one because you actually put money in There are a lot of people with a lot of theory, there are a lot of people who sit down and talk about things while, you know, while they have a cup of coffee and have a lot of opinions, but their analysis is paralyzed and they never do anything, the real investment. of money is what makes investments grow more than anything else.

The second thing I spend most of my time doing besides doing when it comes to investing is I look at long-term rates of return. period of time and you know there are a couple of ways to measure there is CAGR which is the compound formula or there is a simple formula which is just the average annual return over a period of time and you can look at the average annual S&P which is a standard and Poor 500, if you are buying good growth stock mutual funds and you want to beat that, you want to buy a fund that has a higher annual average than the SP over the given time period you are considering, so if we have a diversion that has been open thirty years as it beat the S&P on average thirty years and the average annual return is enough to tell you that, and if you want to compare two funds against each other on how they have done over the same period of time, you can compare it on average annual return and the cagr is a little more sophisticated way of looking at it, but the reasons why you are relevant, the differences are irrelevant, again, if you choose a fund that outperformed the S&P and in you actually invest in it, that's enough knowledge to make you a millionaire, that's what all the data tells us, so all these other divisions, analyzes and details made the spy average 11.6 and then the annual average and then the CAG is ten point seven, yeah or whatever, then you fucking nerds have so much analysis paralysis that you don't actually do anything.

I'm not saying this is you in particular asking about a book for dummies, that's a different thing. but what you have to keep in mind in the open market is that the people who are attracted to the world of financial services are math people, they love math. I'm a math person. I love mathematics and for many years I caught myself getting caught up in more than analysis I was spending a lot of time analyzing I wasn't doing anything and people are paralyzed by analysis and many people in the financial world do the same and will spend an immense amount of their life with your head stuck up your ass trying. discovering something is amazing instead of actually doing it we talk to these millionaires in this millionaire themed hour I'm a teacher Dave my husband is an engineer my wife is an engineer and I'm a teacher and we have invested in our 401K Were you worried about the difference between CAGR and the annual average?

What is that? What is your net worth? 4.2 million What is that? What's the difference they don't even know? the 12 fees B 1 what is that they don't even know that 4.2 million dollars meanwhile mr. The equity nerd here with two nickels to rub can give you all the analyzed breakdowns of everything that happened inside a mutual fund and never did anything and has a hundred thousand dollars to his fucking name, but the guy who actually he did it and picked decent growth stock mutual funds that outperform the S&P which are everywhere by the way, they're the ones who become millionaires, they don't get paralyzed by analysis, so all that to say I hadn't really thought about it before, but I'll probably never recommend a book on the ins and outs of a mutual fund because I don't care and the data says you shouldn't either.

The millionaire data points didn't ruin people with analytical skills, but millionaires and indeed billionaires are people who actually do something with their money to invest it and make it earn and they have some basic investing principles that they use. The CRO view will cover all four types of mutual funds, we talk about growth, growth and income, aggressive growth and international, and you decide. Spread across those four over a thirty-year period, that mutual fund portfolio that outperforms the S&P will have a better performance just by being in one type of fund or just by being in one fund or eliminate any of those four and you will underperform all four. they're together, we've done the research, we've done the analysis, we've broken it down, we've had our smart professionals at Wester review it, we've reviewed it all, it's absolutely there so you don't have to have a big There are a lot of detailed analyzes about this now, you can see it.

I'm not saying I'm not trying to hide anything from you, you can understand that, but my point is these minute monetary differences in views on these things. Honestly, most people don't even think about whether the mutual fund is loaded or not, meaning they paid a commission or not, and that's a mistake, you should pay a commission on a portion of your funds because it brings a quality investment advisor. in your life to guide you through the process and there is all kinds of data that says that people who invest on their own with no load, mutual funds have a tendency to time the market, meaning they try to get in when it's hot and get out when is hot.

It's cold and the people who time the market, tons of research, every type of analysis possible shows that you don't get as high a return as if you just buy and hold and keep holding it and keep holding it and keep holding it and keep holding it but it goes down, no . One gets hurt on a roller coaster, except those who jump. I have never divested from a single mutual fund I own, except when it underperformed over an extended period of time, that is, if I owned a growth stock mutual fund that underperformed. all other growth stock mutual funds over a long period of time, I would move them into a different growth stock mutual fund or, if I was buying real estate, I have withdrawn some no-load funds that I bought for that purpose other than the one I Never in 35 years have I taken money out of the market because I was afraid or entered the market because I was greedy.

I just invest consistently, invest consistently, invest consistently, invest consistently, invest consistently, invest consistently and there are millions and millions and millions. As a result, there are a lot of dollars and the data shows us that when you have someone advising you to keep you from getting in and out and giving you basic information to continue investing, understanding what you are investing. In someone with the heart of a teacher like one of our smart professional investors, all the data tells us that when you stay in the game you don't just jump in and out, you have someone training you to show you how to pick something that has been better. that the sp500 that's really all that matters you say you start investing you keep investing you don't stop investing you don't time the market and you buy funds that I will do the SMP and really if you do that and you keep doing it for an extended period of time you will be a millionaire or better yet this is the Dave Ramsey show