Editor’s note: As we approach the end of 2017, it’s a good time to reflect on our investing habits and prepare for an even better year of trading.
That’s why we wanted to share the essay below from Bill Bonner, chairman of Bonner & Partners, about three key ways to ensure your wealth keeps growing.
Bill’s sage advice will ring true to long-term investors and day traders alike…
Today, three basic skills for building long-term wealth… prompted by some recent reader feedback.
We receive emails from readers every day. We can’t respond to all of them, of course… but we think about them a lot.
Recently, we got two particularly interesting emails. One was from a woman who felt she had been badly handled in a divorce and now struggles to stay afloat financially.
Another came from a man on the opposite side of a divorce transaction. He struggled for years with alimony, child support, and living expenses. He eventually gave up the struggle, declared bankruptcy, and sank beneath the water.
As we’ve been telling members of our family, matters like these are usually far more important to your well-being, your happiness – and even your financial security – than money.
But they share several similarities. In both cases, success depends on habits, personalities, and luck. Virtue pays off – not always, but often. Fidelity. Humility. Generosity. Steadfastness. Hard work. These all tend to pay off in the end, too.
Even if it doesn’t work this way, you are probably better off believing it does. At least then, when things don’t work out, it’s not your fault.
When we read letters from someone with little money, we want to help. Here’s one we received lately:
OK. Here I am, relatively new to your company. Currently, I live on Social Security and a monthly retirement income. This basically amounts to a little over $2,000 a month. When I got married, we started a retirement plan, which we added to every month. Then, 21 years later, divorce happened, and he got our retirement fund. Plus, he also has a retirement fund from his career.
I had graduated from high school and worked to put him through college culminating in his master’s degree. I had a high school degree, working at various clerical jobs until the children arrived, and I quit my job to become a full-time mother.
I have no savings, investments, etc. I am 70 years old and would like you to address how I can deal with the “gloom and doom” I read about in your reports.
We can’t give personalized financial advice. But we have some general thoughts about people in a similar situation.
We sell investment research, analysis, and advice. And our marketers work hard to make them sound as attractive as possible. But when you don’t have much money to invest, an expensive trading service will probably not help you.
For anyone beginning to build wealth, we have some million-dollar advice that we will give to you for nothing: Keep it simple. Keep it cheap. And keep at it.
Yes, we hope that our modest insights and humble thoughts in The Bill Bonner Letter are worth the money.
But please don’t spend any more… unless you have the money to make more expensive advice worthwhile.
And no, we are not saying that sophisticated, alpha-hunting systems won’t work. In the right hands, at the right time, they can work spectacularly well.
But finding them takes time and knowledge. The amateur will almost certainly run out of money before he runs into an expensive trading program that makes him rich.
The basic skills for building wealth are so simple, they barely deserve mention. And like building a family, they take time… often a whole lifetime.
-
Spend less than you earn.
-
Invest carefully in the surest, safest things you can find. Look for things close at hand that you can understand.
-
As you earn more money, then… and only then… can you afford to splash out on lifestyle enhancements and more sophisticated investment tools.
Do this for 20… 30… 40 years… Then let us know how it works out.
Regards,
Bill Bonner
Chairman, Bonner & Partners
Editor’s note: Wealth-building habits like these are becoming all too necessary in today’s volatile financial and political climate.
In fact, Bill says the biggest threat to your wealth is something you’d never hear about from the mainstream media – not President Trump, not the “One Percent,” not even nuclear war with North Korea.
To learn more about this threat, and how you can protect yourself, click here.