Diversification: The idea of spreading out your money across many different types of investments. Choosing to diversify your investment holdings reduces your risk tremendously.
Risk Tolerance: An investor’s ability to withstand losses caused by one or more of the different types of risk. This ability can be limited by your temperament as well as your time frame and financial circumstances. For example, someone who is investing for a goal 10 to 20 years or more in the future generally has a higher risk tolerance and may feel more comfortable with riskier investments than a person whose investment goal is only 5 years away or less.
For more information, visit the show notes at http://www.moneyguy.com/2007/09/mastering-the-world-of-investing
The focus of the program is on the changing retirement landscape.
1974 Retirement Funding:
2006 Retirement Funding:
Defined Pensions: The Endangered Species
For more information, visit the show notes at http://www.moneyguy.com/2007/09/retirement-in-crisis-update
The most important concept that determines how financially successful an individual/family is going to be is:
* Deferred gratification
* The hardest part of financial independence is not the investing… it is the savings factor:
In today’s world it is getting harder to be a good disciplined financial household.Â There is so much outside influence and temptation that only the strongest make it (faking success).
** The desire to drive a new flashy car
** “Same as Cash” for everything including Furniture, Electronics, & Plastic Surgery
For more information, including How to Accumulate $1,000,000 by Age 65, visit the show notes at www.moneyguy.com/2007/09/simple-advice-for-your-finances