SUCCEEDING IN A TOUGH ECONOMY
henever I read or hear new advice, I digest it and then consider the source.Most of the time, it is subjective or infected with special interest. It is not easy tobe a successful investor.My journey in the stock market began more than twenty years ago and includes
a story that exemplies the challenges for the individual investor. I was having
dinner with a friend and he told me a story about Rich.
Rich never expected a speeding ticket to cost him $38,485
Rich was in a hurry to buy some groceries before heading home to watch theYankees game. He was traveling 45 mph in a 45 mph zone, but missed the sud-den sign change to 30 mph. The policeman pulled him over and handed him an$85 ticket. It wasn’t a pleasant way to start his Sunday, but at least, Rich thought“that was that.”A few months later, Rich learned that his car insurance payments increased by$75 a month. Now his $85 speeding ticket mushroomed to $985. A hefty priceto pay for going just 15 mph over the speed limit, but once again, Rich thought“that was that.”Six months later, Rich went to lock in a new home loan. A $750,000 house with a$500,000 mortgage seemed like a conservative ratio. But what Rich didn’t know
shocked him. The mortgage company not only checked his nancials, they also
checked his driving record. The speeding ticket cost him 0.25% on his interestrate (1/4 point). Over 30 years, 0.25% on a $500,000 mortgage equals $37,500.Adding the higher insurance premiums, the seemingly innocuous speedingticket wound up costing Rich $38,485.
Through repetition, I learned the nuances of investing, and in this book, my rst,
I illustrates the compounding effect of innocent mistakes and how to avoid them.I will reveal to you those things that I know can make your investing life miser-