In a major peer-reviewed study from Daniel Kahneman and Angus Deaton from the Center for Health and Well-being at Princeton University, the great debate of psychology – can money buy happiness? – has finally been answered. It turns out, it can up to a point. This isn’t some quick news poll either, it is a…
A member of my family has been using a technique to build substantial wealth that doesn’t require a high income or any specialized knowledge, extra work, or effort. I was so impressed by the way he implemented this program, I thought I would share it with my other family and friends (as well as anyone else who reads my blog) without giving away who it is.
One of the least discussed secrets of great practitioners of the value investing strategy is the use of cash, cash equivalents, and bonds to augment returns. From Benjamin Graham and Warren Buffett to Wallace Weitz and Marty Whitman, intelligent use of excess funds has as much to do with growing your capital over the long run as does selecting individual common stocks. We’re going to look at some of the techniques that have been used by value investors to manage their reserves, and the role played in the overall portfolio.
A family member recently used dollar cost averaging and the power of compounding in such a creative way, that I thought it would be useful to share it. This technique, which he developed after studying the various returns available on different asset classes, was designed to show that two factory workers, both earning the same salary, paying the same taxes, and having the same expenses, could end up with vastly different levels of wealth based on what they did with their surplus cash each month. Let’s take a look at this dollar cost averaging technique and how he hopes it will help him earn several extra hundred thousand dollars in profit over the coming decades.