Monday, December 12, 2005

Step right up, 5 steps for Financial Success

I just read an article on that outlined John Templeton's 5 steps for financial success (billionaire mutual fund magnate, eccentric - wikipedia entry). We can't all expatriate to the Bahamas to avoid taxes like he did (although from what I hear Thailand is still an option), but in these general rules taken from his life there was some sound advice.

To paraphrase:
  1. Take calculated risks.
  2. Save now, spend later.
  3. Be a patient value investor.
  4. Take a free market fundamentals view of value.
  5. Minimize your taxes.
I don't know much about this guy, but I like the simple elegance of these five rules. I'm not adding much original analysis here, so if you want to read them in more depth check out the article, or this other one (written by the same author)

1 comment:

Jmwilson22 said...

I was interested in the Blogs title of the "insane" attempt to retire at thirty, although for most of us we dont have the opportunities he has but his point of view at being smart with your money while your young is very wise. I have been working for a sales company for 4 years during the summer while in school and one important thing I learned from them was about investing, one rule they emphasized was the rule of 72.
Money can multiply quickly. Here is how the rule of “72” works: divide a certain interest rate into “72”, and the quotient is the number of years it takes to double your money. Example at 12% interest – 72 divided by 12 = 6 years to double your investment.

A Roth IRA (individual retirement account) is a way to invest up to $3,000 a year with pre-taxed dollars. I.e. you don’t pay taxes on it when you take it out. Most people will not retire by 30 unless they have extensive investments, however, my manager is planning to retire a millionaire by 42. So not too bad.

If anyone has any comment or wisdom in relation to this, I would appreciate your thoughts.