Ben Stein Net Worth 2023|The Little Book of Bullet Proof Investing summary

 

Ben Stein is an American lawyer, actor, and writer of various best-selling books on finance and related fields. Initially, Ben Stein started his career as a political and economic commentator and then transitioned into acting professionally.

Ben Stein rose to prominence as a speechwriter for Richard Nixon and Gerald Ford. As per verified sources, Ben Stein is estimated to be worth at least $50 million.

Ben Stein is a multipolar personality with interests in fields as apart as entertainment and finance. He has very deep understanding of investing and protecting wealth. He along with Phil DeMuth has written a book called ‘The Little Book of Bullet Proof Investing in which they have succinctly described the important points to be noted while making a bullet proof investing plan.

In this article, we have summarized the key learnings/takeaways from the book.

Important Takeaways

• Don’t trust the Force when investing. Your emotions are contraindicators of what you should do.
• Don’t invest in companies because you think they are sexy and cool or because you want to be cool.
• Do approach the market with great humility and realize that you are powerless over the market.
• Do be patient. The market pays you to assume stress.
• Don’t get hopped up over short-term market events, despite the media’s attempt to whip you into a frenzy.
• Unconsciously, we are all looking for a surrogate parent who will take the responsibility for our investment choices.
• You henceforth will be living as a grownup who takes responsibility for his or her life, not as some 45-year-old Peter Pan.
• The goal of investing is to maximize our lifetime state of wealth.
• Do have a financial plan. Otherwise, you are flying blind.
• Don’t think that you can safely turn over your investments to someone who is much smarter or wiser than you are.
• Don’t assume that just because you are capable of managing your finances by yourself you will be better off in the long run if you do.
• Do pay as little attention as possible to the financial media. Investing is not a competitive sport.
• Don’t assume that anyone else will care as much about your financial life as you do.
• Don’t let anyone use flattery to get their hands on your money, even (especially) if they work for some prestigious financial firm.
• Don’t assume that you can beat the market by stock picking. Do you know something the market doesn’t?
• Don’t give any weight to market forecasts. All opinion pro and con are already built into the price of equities today.
• Don’t assume that if anyone were genius enough to devise a market-beating strategy he would be stupid enough to share it with anyone.
• Don’t think you can successfully engage in short-term market timing.
• Don’t look to the stock market for investotainment.
• Do trade as infrequently as possible.
• Don’t speculate on stock tips.
• Don’t go on margin.
• Don’t follow fads.
• At some point you will hear the idea that this time it’s different: There is some New Order, New Paradigm, New Normal, New Economy. This is bunk. There is no new anything.
• When people say they have a high-risk tolerance, what they really mean is that they are willing to make a lot of money.
• People do not buy and hold. They buy and sell.
• Do keep it simple and conservative, both with your portfolio and your individual investments within the portfolio.
• Don’t assume that because you own a bunch of different – sounding mutual funds your investments are diversified.
• Do invest in passive index funds wherever possible.
• Do keep a close eye on fees, expenses, commissions, and taxes.
• Do buy and hold; don’t buy and sell.
• Do monitor your investment performance.
• Don’t use a Cosmo – style quiz to determine your risk tolerance.
• Do start by trying to plan for the worst scenario you are likely to face, since otherwise you will be tempted to scrap your investing program at the worst possible time and possibly destroy a lifetime of investing returns when you do.
• Do consider overweighting small company, value, and low-beta stocks in your portfolio to improve your overall risk-adjusted returns.
• Notice how when a crisis hits, U.S. Treasuries are suddenly what everyone in the world wants to own.
• Do assemble your portfolio based on how much you can stomach losing.
• Do make U.S. Treasury securities the centerfold of your fixed-income holdings. You don’t want to have to worry about default risk the next time a crisis hits (unless that is the next crisis that hits).
• Do diversify globally with your stock and bond holdings.
• Don’t forget to use inflation – protected bonds.
• Do take your career into account when deciding how much risk to take with your investments.
• Do use a brokerage where fees are low, and you won’t be charged for infrequent trading.
• Do Park assets where they will suffer the least at the hands of the taxman.
• Don’t rebalance your portfolio just for its own sake. Wait until the underlying positions get significantly out of alignment. In normal circumstances, rebalancing once every three years is plenty.
• Do regard college as part of life, not a vacation.
• Do get as much education as you can, especially if it is in a field that leads to gainful employment.
• Do be a builder; don’t be a critic.
• Don’t hang out with anyone you don’t want to become like.
• Don’t indulge in drugs or alcohol except in homeopathic quantities.
• Do be a person of good character and earn the trust that others place in you.
• Do pay attention to appearances and mind your manners; first impressions count.
• Do remember that an attitude of gratitude is the surest get rich- quick scheme.
• Do get over the fact that life isn’t fair and start living in the real world.
• Don’t waste your—or other people’s—time.
• Do read the Wall Street Journal every morning.
• Do marry and stay married to a sensible person, especially if you can find one.
• Do keep in mind that children today are luxury goods.
• Do live below your means. Do save below your means.
• Do what you can to protect your assets from creditors, lawsuits, and evil ex – spouses.
• Do have a reserve fund.
• Don’t play games with the IRS.
• Don’t borrow money except to buy an appreciating asset.
• Do buy a home once you are ready to settle down.
• Don’t buy into a red-hot real estate market.
• Don’t buy so much home that you become “house poor.”
• Don’t use anything but a 30-year fixed-rate mortgage unless it is a 15-year fixed-rate mortgage.
• Do let movie stars own vacation homes; you are just visiting.
• Do be realistic about how much your house is worth when selling.
• Don’t move frequently. Three moves equal one fire, as the proverb says.
• Do postpone retirement as long as possible. The safest time to retire is never.
• Do relocate to an area with a lower cost of living to have a higher standard of living.
• Do use an immediate, inflation-adjusted annuity to convert your nest egg into the maximum amount of income, but the longer you can put off buying it and the higher interest rates are at the time, the higher the payout you should receive.
• Don’t take out a reverse mortgage except as a last resort.
• Do recalculate your withdrawal rate every five years during retirement. You may be able to increase your payout.
• Do replenish your savings as aggressively as you can.
• Don’t take Social Security as soon as you are eligible. It often pays to delay.
• Don’t blindly accept a lump-sum payout from your pension plan.
• Do have a will, plus all the other legal apparatus you need in order to depart this vale of tears with things in good order for those you leave behind.
• Do consider tax-saving estate giving strategies, such as 529 plans and annuities, for your grandchildren if you can afford it.
• Do leave a detailed list telling your survivors the who, what, where, when, and how of your financial empire.
• Don’t start a family foundation unless you are as rich as Bill Gates.
• Do get the highest yield you can on your cash balances.

Final Thoughts

Ben Stein and Phil DeMuth argue that without long – term compounding of our investment returns, (making money off the money we save) our savings will never grow enough to finance our long – term goals. The financial services industry has failed to engineer a solution that manages wealth in a way that addresses both people’s short – term ability to withstand loss as well as their long – term need for capital appreciation.We invest for the long run, but we still have to eat every day. John Maynard Keynes said that in the long run we are all dead. Unfortunately, Keynes’s long run can catch up to us before Siegel’s does. The authors also make an interesting point one should not trust the Force when investing. Our emotions are at best a contrary indicator, leading us to do the opposite of what we should.

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