Storm Proof Your Money: Weather Any Economy, Rebuild Your Portfolio, Protect Your Future

224 Pages·2009·1.83 MB·English

by  Brett Arends

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STORM
PROOF
YOUR
MONEY
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STORM
PROOF
YOUR
MONEY
WEATHER
ANY ECONOMY,
REBUILD
YOUR PORTFOLIO,
PROTECT
YOUR FUTURE
Brett Arends
John Wiley & Sons, Inc.
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Copyright © 2010 by Brett Arends. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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Library of Congress Cataloging-in-Publication Data:
Arends, Brett.
Storm proof your money : weather any economy, rebuild your portfolio,
protect your future / Brett Arends.
p. cm.
Includes index.
ISBN 978-0-470-48268-1 (hardback)
1. Finance, Personal. 2. Investments. I. Title.
HG179.A67 2009
332.6—dc22
2009029133
Printed in the United States of America.
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For Linda
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Contents
Acknowledgments xi
Chapter 1 Getting Started 1
About Me 3
About This Book 3
Chapter 2 Checking the Map 7
The Lesson of Harry Patch 8
Santa Claus Isn’t Coming to Town 9
Where Are You Trying to Go? 12
Where Are You Now? 16
How Much Do You Need to Save? 19
How Can You Move the Numbers in Your Favor? 23
Conclusion 28
Chapter 3 The Basics 31
Break Out of Debt 31
Secure Your Financial Lifelines 36
Check Your Big Risks 42
Conclusion 45
Chapter 4 How Not to Invest 47
Putting Too Much Faith in Stocks 48
Putting Too Much Faith in Phony Diversification 53
Taking Too Much Risk 55
Misunderstanding Your Mutual Funds 58
vii
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viii CONTENTS
Chasing Performance 63
Trying to Find the Next Apple 65
Owning Shares in Your Employer 67
Keeping All Your Money in the Bank 69
Keeping All Your Money in Bonds 71
Stockpiling Gold 73
Investing Too Much in Real Estate 76
Conclusion 80
Chapter 5 Storm Proof Your Portfolio 83
Inflation-Protected Government Bonds 84
Global Index Funds 87
Flexible Funds 93
Covered Call Funds 106
Precious Metals 108
Taxable Bonds 112
Municipals 116
Closed-End Funds 118
Timing: Little and Often 120
How to Handle a Crash 123
Using Options for Financial Insurance 126
Conclusion 127
Chapter 6 Cash Flow Positive from Right Now 129
Your Hidden Costs 130
Repeat Costs 132
Give Yourself a Raise 135
How to Make $500,000 the Easy Way 138
Adding It All Up 155
Further Thoughts 156
Conclusion 158
Chapter 7 Cover Your Assets 161
Why Tax Shelters Are More Important Than Ever 161
Make the Most of Your 401(k) 164
Make the Most of Your IRA 165
Life Insurance and Variable Annuities 166
Self-Employed Shelters 168
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