1. A Wealth of Common Sense

By Ben Carlson

2. Summary

- This book's purpose is to put investing into reality without the fluff.

  • Remember that the house almost and most of the time always win and once again if you don't have a butt ton of money, it will make it impossible to "follow the herd" and make money.

    • Don't Invest the same way as big institutions. Big institutions have a lot of purchasing power and can even lower the fees associated with trading. 

    • Also, big institutions have employees that work full time on their portfolios at all times, unlike most normal people.

    • The Yale Model

    • Knowing what not to do

    • High Reward, High Risk

    • Know your Personality before investing.

  • Damn, ain't this the truth. I like the subtext on the Cover though saying that "Why simplicity trumps complexity in any investment plan". Simplifying things is usually always the best plan.   

3. Unfair Advantage & Emotions

- "Yale Model"

  • David Swensen is the Chief investment officer for Yale. He is very successful with 14% gains. Yale gets so much money from grants and donations they can receive cheaper management fees and also can be established as a non-profit.

    • Well Farts, what is in it for me than, lets continue.

- What Not to DO, and What Not to Expect

  • ​Don't Expect the Get Rich Fast scheme, this isn't real. Don't follow the herd, and don't be overconfident. This could save you 3-4% in investments.​

    • Even doctors agree with me. Also, Ben Carlson went to Yale for his undergrad so he might actually know what he is talking about. Smart people are either telling you that the get rich fast scheme is BS or the ones running one. Think about it...

- Being Emotionally Aware

  • How our emotions influence our actions and the people around us can even apply with investing. Invest in things that you truly understand.

    • Listen to the man. I have invested in a lot of stupid shit in the past just because I heard about it on either social media or the friend and got really excited to invest in it, that it usually was a flop right after the buzz dropped. Remember bit coin? 

4. Taking Risks for High Rewards

- Rewards

  • Risks are always attached to rewards. There will be a bumpy ride if you're hunting big rewards. Nothing's FREE, otherwise we would all be successful.

    • Once again, aim for the stars, but be persistent to truly succeed. Having patients and knowing the "common sense" model is a helpful way to always be prepared for other options.

- Stocks, Bonds, and Cash Return Examples

  • Stocks average return from 1928-2013: Stock= 6.5%, Bonds= 1.9%, and Cash=0.5%.

    • This might not be much of a surprise to you, but the truth is investing returns pennies if all you have is pennies to begin with. My recommendation is to invest when you have money or at least invest what you are okay with losing to learn how the market works.

- Diverse Portfolio and Commitment

  • Theory is that if one goes down, the others will go up and support your loss. If you do it right. Fidelity Investments revealed that the best investments are the ones that are forgotten.

    • Good Ole' Benjamin Franklin was a master in investing and really understood what compounding interest was. A good example of this was when he gave Boston and Philadelphia 1000 pounds with the stipulations of both cities had to invest the money compounding by 5% yearly and couldn't touch it for 100 years than to only be able to spend three quarters of it on city improvement projects which was about 3/4 of 657,506 and had to invest the 1/4 in the same way.

    • Compounding interest is huge when thinking about investing.  

5. Personality Investments

- Knowing your Personality

  • Take a Personality Quiz to better understand yourself. What are your core investment values and what is your personal long-term goals?.

    • Everyone is different and that is what you should be aware of when investing. I want different things than you do, so be aware of that. Don't just think that cause you want money, you will get it.

- Investment Plan

  • Are you a risk taker or do you want to hold on to investments? Stick to this throughout your journey so that you will never be uncertain. Put this on paper and reflect every time you invest. 

    • I am aware when I am a risk taker and when I am a invest and hold investor. I believe you can do both as long as you are aware of what you are doing.

- Stay Calm and Composed

  • Change your personality in the investment game to become successful. Understand what your getting yourself into and know that there are risks involved always. 

    • Don't invest money that you truly need and that would really piss you off because now your bankrupt overnight.