Supercharged! Talking Millions with Paul Merriman

Supercharged! Talking Millions with Paul Merriman

Today, we have a special treat: an interview with Paul A. Merriman, founder of Merriman Wealth Management and the Merriman Financial Education Foundation! In November of 2020, he and his co-author, Richard Buck, released their latest book, We’re Talking Millions: 12 Simple Ways to Supercharge Your Retirement.

Too long? You can find an abbreviated version of this interview here! I think the full version is worth reading, but maybe you're in a hurry...

Introduction

In his ‘Simple Path to Wealth’ blog post, Jim Collins—of JLCollinsNH.com fame, and author of a book also named The Simple Path to Wealth—advocates putting your money mostly into the total U.S. stock market, so that you own a small piece of nearly every publicly-traded company headquartered in the United States.

More specifically, he recommends putting 80% of your money into VTSAX (Vanguard total stock market index fund) and 20% into VBTLX (Vanguard total bond market index fund), or their ETF counterparts, VTI and BND. That’s about as simple as it gets!

Really, he prefers the even simpler approach of 100% VTSAX. But he understands that not everybody is comfortable in 100% stocks; moreover, he cites some academic studies suggesting that an 80/20 mix might actually yield slightly better long-term results.

His basic reasoning for this equity-heavy approach is that, over the very long run, stocks have proven to be the most powerful wealth-building tool available. As a total-market index fund with very low fees, VTSAX gets you some exposure to every piece of the market—large cap, small cap, value, international, and even a very small proportion of REITs.

Mr. Collins was the first person I ran across who had specific, concrete recommendations for which investments to buy. I was a big fan of how he explained the logic behind his advice—instead of just saying “Do this,” he also said “And here’s why.”

His writing is clear and conversational in tone, which makes it easy to understand, and his advice of buying and holding two funds is also pretty straightforward for a novice. That’s a big reason why, as it approaches 10 years old, his blog remains popular as a source of investment advice for the digital generation.

Not long after wading through Jim Collins’ whole stock series, I ran across a MarketWatch article by Paul Merriman (I don’t remember which one…give me a break, it’s been a few years). I found the article well-reasoned and clear, and it provided a perspective I hadn’t considered before.

On a whim, I clicked the author page, and discovered that Mr. Merriman, a retired financial advisor and founder of Merriman Wealth Management, had a whole website devoted to financial education. He even had three books available for free, no sign-up required!

These books were collectively called the How to Invest series. That certainly got my attention—it sounded like exactly what I was looking for, and was co-authored by a credentialed and experienced financial advisor (Paul Merriman) as well as a veteran financial journalist (Richard Buck)! Not one expert, but two!

When you’re a grad student living on a $12,500 annual stipend, you’re certainly glad for all the free resources you can get! Especially when those resources will help you build wealth over time—once you’re no longer an impoverished student, of course…

Having read and comprehended the jlcollinsnh approach, I eagerly read the First Time Investor series to get the perspective of these experts. And…I didn’t quite grasp some of it.

Why buy eleven different funds, I wondered, when you can just get the whole kit’n’kaboodle with VTSAX instead? But the books insisted that, over the course of decades, some of these funds actually beat the market, as represented by the S&P 500.

So I continued my journey, learning more about how to invest my money (once I actually have some!).

In 2020, I decided to re-visit those 3 free books. Even though, as an ‘essential worker,’ I didn’t get even a bit of time off work for the pandemic.

And it turns out that those free e-books contain what Paul and Rich call ‘the Ultimate Buy-and-Hold Portfolio.’ Ultimate, of course, meaning ‘the best possible.’

Although the word ‘ultimate’ is frequently thrown around by marketers trying to sell you something that we all know will be topped next year, Paul and Richard have written that they chose this word deliberately.

This Ultimate Portfolio is backed by the research of a lot of smart people who have nothing to gain—but much to lose—from deceiving their readers.

Since the Froogal Stoodent in 2020 is older, wiser, and more sophisticated in the ways of investing than in years past, this ‘Ultimate Buy-and-Hold Portfolio’ suddenly made perfect sense to me.

So which is actually better: the JLCollinsNH Simple Path, or Merriman and Buck’s Ultimate Buy-and-Hold approach? And how different are they really?

And more to the point—what should you actually do with your money?

The Interview

You certainly didn’t visit this page to read my blabber! So let’s get to the guest of honor:

Froogal Stoodent: Paul – having read quite a bit of your work, it seems to me that you and Jim Collins agree on many of the broad strokes:

• use low-cost index funds

• use Vanguard if possible

• concentrate on stocks to generate wealth

• buy-and-hold; don’t try to time the market by dancing in and out

Paul: Actually, Fidelity and Schwab have competitive, low-cost index funds.

True. I noted in my previous post that Fidelity actually has several stock index funds that are actually lower-cost than Vanguard, including the zero-expense FZROX! However, Fidelity’s total market bond fund is considerably higher (0.45% expense ratio vs. 0.05%).

However, your own Ultimate portfolio is a bit more nuanced than Jim Collins’ advice. Though your recommendations seem to have changed a bit over time, it seems to me that you like to divide up your stocks, rather than using one big Total Market Fund. Specifically, the Ultimate Portfolio gives equal weighting to several different types of funds, both U.S. and international, as well as a small allocation to real estate. How did you arrive at the figures described at the above link, and why did you choose equal allocations?

Paul: If an investor was aiming for the best return they would likely put all their investments into small-cap value. But the idea for this portfolio is to earn a higher return than the S&P or Total Market Index with little to no extra risk.

We know that all ten equity asset classes in the Ultimate Buy and Hold have made more than the S&P over many market periods so we made the decision to give each winner an equal position. The bottom line was to create a portfolio that was diversified at every level. An all-U.S. portfolio heavily favors large cap growth, so it's insufficiently diversified for our purposes.

I’ve often said, there’s no risk in the past. I know exactly where I should have put all my money in 1986: Microsoft!

Froogal Stoodent: Or Apple 1999.

Paul: Of course, I also could have put my money into Apple before it went down to almost nothing!

When we look backward, we know exactly what not to do, and when not to do it. I wish I could tell you to put all your money in the next Microsoft or Google or Amazon, starting on such-and-such a date, but you just don’t know the future.

People who say ‘stocks are better than bonds,’ well, I can prove to you that’s not true. There was a man named Smith, I can’t recall his first name at the moment. He wrote a book in the 1920s that made the case that stocks were better than bonds. It was the first time the public had been introduced to that thought in a retail book like you’d see on the market today.

[Froogal Stoodent note: The book Paul references here is Common Stocks as Long Term Investments by Edgar Lawrence Smith, published in 1924.]

The graph he showed—and this is the danger of charts—was from the late 1860s until the mid-1920s. [1923, to be precise.] When you extend that out another decade, it turns out that from the 1860s through 1933, you were better off in bonds!

So, Jim Collins may be wrong, I may be wrong, who knows what the future holds? But what I can say is: I’m not relying on any single asset class. We have a few different strategies; one includes international and one focuses on U.S. only.

Consider this one: 25% large blend, 25% small blend, 25% large value, 25% small value. This adds diversification and can serve as a replacement for those 10 different funds [in the Ultimate Buy-and-Hold Portfolio]. You don’t have to have 10 different funds to take advantage of all the different kinds of stocks.

FS: So the important thing is to keep some eggs in a few different baskets.

How about international? Some advocate including developed countries like Japan or the European nations, others argue in favor of emerging markets like South Korea, Russia, China, and Brazil, and some (like Jim Collins) say that U.S. stocks are really all you need, because many American companies already do a bunch of business overseas.

Paul: If you own all 10 funds in the Ultimate Portfolio, then you’ll have massive, massive diversification, and probably the lowest-risk equity approach you can take, if you consider that even the United States can collapse.

You may not believe that’s possible, but the academics say ‘never put half your money into any one country’s investments.’ There’s too much history saying that’s risky business.

Whatever’s doing well at a particular time, you want a piece of the action. I’m not suggesting anybody throw out the S&P 500, or a total market index, although you could.

A newborn child, you could put right into small-cap value. [Excitedly] I’ve got a couple numbers here, could I share them?

FS: Yes, please do!

I want young people to understand this. A dollar in T-bills, guaranteed to be safe, has compounded at 3% since 1928. That initial $1 has grown into about $16 today, before adjusting for inflation.

A dollar in long term government bonds, 5.6%, almost doubling the rate of return on T-bills—still guaranteed (but not on a daily basis)—that grew to be worth $159.

The S&P 500 is worth $7071. The total market index is worth $5970. That difference, by the way, between the S&P 500 vs. the total market index, is two-tenths of a percent, or 0.20%.

[Amused] That’s a difference of over $1000.

Per dollar initially invested in 1928, yes.

Continuing with this exercise: a dollar in large-cap value stocks in 1928, that would be worth $16,397 today. Small-cap blend, $34,542, and small-cap value, $132,740.

If you put the four of them together and said, ‘give me 25% in each,’ your dollar still would end up being worth $27,087.

It’s a huge step to go with government bonds, going from short 30-day T-bills to much longer maturities. It’s all about how much risk you’re willing to take. Greater risk, greater return, as we can see from that exercise.

And along similar lines, I have data from the S&P 500 dating back to 1970.

FS: Hey, I have a spreadsheet with that same data! $10,000 turns into some incredible amount, like $25 million or something.

Paul: No, I don’t think it’s quite that high, not since 1970.

[FS Pulls up spreadsheet] Matter of fact, I have it here. A $10,000 lump sum in 1970 would turn into more than $1.5 million by the end of 2019.

Paul: Yes, in fact, I remember that number. $100,000 would be over $15 million.

FS: And that’s why you’re the professional and I’m just a random blogger! Anyway, additional research (such as your own points here, here, and here) has convinced me to pivot to a more diversified approach.

I compare your advice to that of Jim Collins because, frankly, his simple approach got me started with investing. His approach is simple, logical, and robust, which provides a level of psychological comfort that explains the popularity of his blog and his book.

Why have I strayed from the Simple Path?

Mo’ money, that’s why! I explain my reasoning in the following nerd-tastic paragraphs. (You’ve been warned…)

*Nerd alert!

Basically, total-market indices like VTSAX are inherently large-cap heavy. A couple of equal-weight S&P 500 indices exist, like the Invesco Russell 1000 equal-weight ETF (EQAL) or iShares MSCI USA Equal Weighted ETF (EUSA). And there’s even some data to support that, at least for certain time periods, the equal-weight version outperforms a ‘normal’ cap-weighted S&P 500 index!

Despite that, I haven’t found an equal-weight total market index—and I don’t really expect to find one! That’s because of how total market index funds are set up and maintained, with minimal trading and an ultra-low-cost approach. Equal weighting would necessitate more frequent trading, which would result in a higher tax burden, which would ultimately get passed on to the fundholders in the form of a higher expense ratio, higher capital-gains taxes, or both. This would negate (or at least reduce) the advantages of indexing in the first place!

*End nerd alert

FS: In We're Talking Millions, you suggest either 90% in the target-date fund and 10% in the small-cap fund, or 80% in the target-date fund and 20% in the small-cap fund for additional growth. What is the advantage of using a target-date fund?

Paul: The target date fund gives an investor almost all the management they need to invest over a lifetime. The managers decide the best balance of stocks and bonds, the best balance of U.S. and international stocks and bonds and how to reduce risk as the investor get closer to retirement. All the investor has to do is pick the retirement date!

FS: It’s striking how much your Two Funds for Life Portfolio resembles Jim Collins’ Simple Path to Wealth, although a savvy investor is aware that some key differences exist. Serendipity, or copycatting?

Paul: The differences are huge in one important respect: returns. We estimate the Two Funds for Life will make 20% to 60% more than the Simple Path, depending on the specifics of how an investor implements the strategy.

Jim’s recommendation is not a bad one, it simply doesn’t address the needs of investors who would like to take a bit more risk to gain a higher return.

FS: And as we’ve just seen in your example starting with $1 in 1928, an advantage of even 0.20% can mean many thousands over a long time frame.

These days, Paul, you’ve spent quite a bit of time and effort advocating the Two Funds for Life portfolio. This amounts to a target-date fund, plus a dose of small-cap value stocks for added growth.

Why did you and your team decide on this simplified approach?

Paul: My own stepfather went to work for the state highway department, they had a pension. They put that money aside for him, they put it in the pension, they invested it for him. And when he retired, the money flowed! He loved it, because he could depend on it, without having to take any responsibility!

But now our society says we’re not using pensions, and that happens by creating a product that the employers could keep from being obligated to service your retirement.

Now, what they say is, ‘you have a 401(k) that you can invest in if you want to, and we’ll match a little.’ But it doesn’t ensure the cash flow that a person would have from a pension.

A target-date fund is the closest thing that I know to ensuring that check once you get to retirement. The people who manage those funds, they’re doing the right thing for a given retirement cohort.

Now the problem is, there’s big money in not doing the right thing. The big money comes from active management, from a sales load, from higher expenses. All those things are likely to hurt, rather than help, you.

I say in We’re Talking Millions, I’m not a big fan of 100% of target-date funds [because some of them are not set up in the customer’s best interest]. I recommend target-date funds that use low-cost index funds to invest in equities. I think there should be a choice: if you have actively-managed portfolios available to people, you ought to also have buy-and-hold, passively-managed funds, with low expenses.

So many people I talk to are in a 401(k) where it’s all active management! In fact, one person recently, in a good-sized company, 400 or 500 employees, they have their 401(k)s in T. Rowe Price. I think T. Rowe Price is a very fine firm for actively-managed accounts, if that’s what you want.

But they’re tacking on an extra half a percent on every fund available in that 401(k)! It’s not T. Rowe Price that’s adding the extra fee, it’s the people who are administering the plan! And that’s because they don’t want to be on the hook for the $50 per year that it costs to have that account on the books.

But if somebody has $200,000 in there, they’re paying 1000 bucks a year for the right to have that account administered—instead of $50! It’s this kind of rip-off that I’m fighting, and I think you are too!

FS: Infuriating, isn’t it?

Our conversation today makes me, as an early-career worker and investor, lean towards something like 20% of my equities in a small-cap value index like VSIAX, as you suggest in We’re Talking Millions. But I’ll have to play around with the numbers a bit, until I get a bit more comfortable with where that fits into my overall plan.

To maximize returns, wouldn’t it be better to go with an S&P 500 fund, or better yet, a total-market index fund like VTSAX or FZROX, instead of a target-date fund? And then convert a small portion over to bonds once you’re in your 50s?

Paul: That’s very tricky. To maximize returns, investors should maintain an all-equity portfolio for the rest of their life. If you are not going to use a professionally-managed glide path inside a target date fund, you are going to have to create one yourself.

If you are going to do that, you can build an all-equity that includes big, small, growth and value stocks from around the world. Our recommendation is still to diversify away from an all-U.S. large cap growth portfolio.

Why so much emphasis on diversification? Here’s one of the most important lessons I have for people to learn.

There’s a three-pronged fork in the road that every investor is going to face. They’re going to have to trust somebody.

Source 1: Wall Street. If I depend on Wall Street as the source of my information…I look at the outcome. It looks to me like they make the money. In fact, they’re guaranteed to make money even if you don’t make a dime on your investments!

Whether it’s the commission they charged you, or the management fee…whatever it is, they’re making their money! You may or may not, but they will.

Source 2: Main Street. People trust other folks that they think have done it right.

If I know somebody who held Microsoft stock and became a multi-millionaire, and now they tell me that they think this other stock looks pretty good, well now I’m interested.

I don’t know if you’ve ever played the horses [nope], but I have, from time to time. And I’ve noticed some things about human nature—you get lessons there in 15 to 20 minutes that are worth a million dollars!

If I have two winners in a row, the people sitting near me will ask which horse I’m picking next, because they think I know something they don’t. Humans are not very good with statistics, and fallacies like the recency bias are overwhelmingly bad for us [in the financial world]. But it’s very hard to get away from!

I don’t trust Main Street. I don’t know if they’re telling me the truth. I don’t know if they’re leaving out some important information. They don’t have any documentation. All they have is a meaningless story about what’s happened in a 5- or 10-year period. That means nothing!

Just look at the S&P 500 from 2000-2009. That’s a 10-year period, where the S&P compounded at something like negative 1 percent. But look at the 5 years from 1995 to 1999, where the S&P 500 compounded at 28.5 percent. There were people in 1999 saying investors should expect to get 20-30 percent per year over the next decade! We know that’s a trap, and it’s caught a lot of people.

[Froogal Stoodent note: particular economic conditions can affect this as well. I’ve heard my elders saying things like “You can’t lose money in real estate! I’ve talked to lots of people who’ve made a killing!” But they’re talking about people who bought property in a high-interest-rate environment in the 1980s or early 1990s. High-interest-rate environments depress the amount people are willing to pay for the house itself. Since that time, however, interest rates have generally decreased, leading to inflating property valuations.

So that well-intentioned real-estate advice is misleading—because the interest-rate environment is very different in 2021 than it was in 1981 or even 1991. Buying now, when interest rates have nowhere to go but up, will end up depressing home values in the future, which will rob some people of the ‘surefire’ gains they’ve been expecting. Diversify, diversify, diversify.]

Source 3: University Street. The people that I trust, that third fork in the road, is the academic community. I refer to it as ‘University Street.’

It’s not that they know the future. But they certainly know the past, and if they try to fool their peer reviewers based on a few years’ worth of data, or a cherry-picked time frame, they’d be laughed off the stage!

That’s very important, because most of us are not peer-reviewed, or reviewed by experts. Outside the university, how many people know how to intelligently challenge somebody else’s claims? How many people know how to take on Jim Collins? Or Warren Buffett, when he says to just invest in the S&P 500?

What the academics say, is that these 10 asset classes that I talk about [in the Ultimate Buy-and-Hold Portfolio] are all statistically meaningful. When they show me the outcome of their spreadsheets, I take their word for it.

Am I the dupe, and am therefore duping you? I don’t think so, because the other academics who look at this information come up with some very similar answers. Not always exactly the same, but close.

In fact, the 12 ‘million-dollar decisions’ I mention in the book—there’s nothing new in there! Low expenses, massive diversification, equities…all the academic experts emphasize these factors. Historically, those 10 different asset classes have gotten the best returns with the lowest amount of relative risk.

The very best returns would come from a small-cap value index. Over the long run, it’s yielded 13.5 percent per year, on average. That’s why one number [from the example above] is $132,000 and another number is $7000! But with volatility and changing market conditions, it’s too much to ask for someone to be invested entirely in that single asset class.

I don’t advise 100% small-cap value, because it’s too radical, and I’m trying to serve as many people as possible. We definitely shouldn’t have just one stock, and I believe we shouldn’t have just one asset class, either. I recommend these 10 different funds, not necessarily knowing which one will do the best in the future, or even whether they’ll do as well going forward as they have in the past! So I’m spreading the money out equally between them.

However, I’ve had a lot of people who have followed my work ask about the best way to give for children or grandchildren. That’s the way I’d go—put aside 365 dollars per year in a small-cap value index fund, for a newborn child. For each year they do that, by the time that child is ready for retirement, that $365 should have turned into enough money for one year’s worth of living expenses.

Even in the Two Funds for Life, just putting 10 percent of that portfolio into small-cap value is expected to add about 30 percent to the amount you have to draw on when you retire!

Now you can do that Two Funds for Life portfolio by putting 10% or 20% into small-cap value and the rest into the target-date fund, or you could use the formula that Chris Pedersen came up with: take you age times 1.5, put that into small-cap value, then put the rest into the target-date fund. Over time, with that simple formula, you’ll adjust your portfolio to be more conservative, in much the same way that the target-date fund automatically adjusts to be more conservative over time.

In Chris’ book, which will be coming out this year [2021], he digs deeper into this strategy. And he investigates what will be the implications of leaving a little bit of that small-cap value fund in the portfolio when you’re in retirement.

FS: Why have you pivoted over the years from the Ultimate Buy-and-Hold Portfolio to this Two Funds for Life Portfolio? Have you abandoned the Ultimate portfolio, or are you simply responding to consumer demand for simplicity?

Paul: I sponsor a class at Western Washington University, called Personal Investing 216; it’s built for non-finance majors. It’s been full every quarter since it started in 2015. And at the end of the year, I have a presentation for all the university’s seniors. I’m trying to tell them, ‘here’s what you do when you go off to work and start your 401(k),’ giving them a lot of do-it-yourself information.

And at the end of my presentation, I ask, ‘okay, how many of you want to be responsible for making the investment decisions in your household?’ Out of 150 to 200 kids in the room, only two raised their hands!

That says to me, most are looking for an answer where they don’t have to think about it.

In talking to John Bogle, who’s been the most impactful of anyone I’ve talked to, he convinced me that “If you really want to help people, you’ll quit trying to get them to buy 10 funds, when they can do almost as well with two or four."

He’s right, and that caused us to start focusing on simplicity. When my company managed people’s investments, we used those same 10 funds. But we weren’t asking our clients to do that; we were doing it.

The Ultimate Portfolio is good for DIY investors. I use it in my own portfolio, so it works well for me! The problem is that most investors don't want to manage all those moving parts. Plus, the Ultimate Buy-and-Hold doesn't have a built-in glide path like the target date fund. In general, the fewer things you have to leave to the investors, the better off they are.

FS: Today, we’ve discussed three different portfolios at length:

1. Jim Collins’ Simple Path to Wealth; 80% VTSAX / 20% VBTLX

2. Paul Merriman and Richard Buck’s Ultimate Buy-and-Hold Portfolio; various holdings

3. Paul Merriman, Richard Buck, Daryl Bahls, and Chris Pedersen’s Two Funds for Life portfolio; 80% in a target-date fund (for example, VFORX, Vanguard’s Target Retirement 2040 fund) and 20% in a small-cap value index fund (such as VSIAX or its ETF equivalent, VBR)
   

4. Since the Froogal Stoodent is never, ever satisfied, he can’t resist the urge to tinker. So, as though he actually has a clue what he’s doing, he’s gone and proposed a five-fund portfolio, called the Couch Potato portfolio: 50% VTSAX, 10% VSIAX, 10% VEMAX, 10% VGSLX, and 20% VBTLX. Kind of a hybrid of the Simple Path and the Ultimate Buy-and-Hold.

Thoughts on which is best for an early-career investor whose main goal is to maximize returns? Ahem. Asking for a friend…

Paul: I don't want to give personal advice; you just don't know the particulars of everyone's situation. The academic research into those 10 equity classes [in the Ultimate Buy-and-Hold Portfolio] indicates that they have the best probability of success, based on historical results.

I would say that a young person could probably move their bond allocation into the best-performing asset class of the bunch: that's VSIAX [small-cap value]. That should increase the returns by at least 1% to 1.5% per year. As we describe in We're Talking Millions—over the long haul, that could be a million-dollar decision!

What we’ve done with this book is to advocate getting a piece of everything with the Target-Date Fund, plus one [namely, the small-cap value index]. Note that target-date funds hold both U.S. and international equities. The specific percentages may vary by fund.

And by design, target-date funds automatically rebalance and put you on a professionally-managed 'glide path' as you age, so you don’t really have to do much.

FS: Do you see We’re Talking Millions! as complementary to your other books, like the How to Invest series, or do you think that your latest book is comprehensive enough to replace those earlier works?

Paul: We’re Talking Millions! 12 Simple Ways to Supercharge Your Retirement makes the case for how 12 easy steps can each add a million dollars to your retirement.

It makes the process much easier than in my earlier books. You don’t need the other books, but what you do need to do is use all of our free tables at paulmerriman.com. You can find a link to several tables, an article, and two podcasts on the topic at the link here. I think those tables will help you identify your risk tolerance, and the distribution tables found here will help you when you are ready to retire.

FS: For those who like to get down-and-dirty with the data, do you know of a good data source for various types of investments? For example, a DIY fan might like to compare the long-term returns of REITs, small-cap value stocks, large-cap value stocks, emerging market stocks, etc. Is there anywhere people can go to get information that’s fine-grained enough to evaluate these different asset classes?

Paul: We have a number of tables tracking the impact of dollar cost averaging into the market annually from 1970 through 2019. These tables reflect the use of different combinations of asset classes (equity/fixed income) including the S&P 500, U.S. 4-Fund Combo, All Value, Ultimate Buy and Hold 10 Fund Strategy, and Small Cap Value.

We also have the yearly results of the same combinations showing annual returns from 1970-2019 at this link. We call those the 'Fine Tuning Tables' as they show the impact of returns with 11 different combinations of equities and fixed income. Those tables also show the worst 12, 24, 36 and 60 month periods for each combination. This link takes you to a list of the tables, articles and podcasts on the subject.

We also have the yearly results of taking fixed and variable distributions from the same set of combinations for the 1970-2019 period. The fixed and variable distributions are based on 3, 4, 5 and 6 percent withdrawals. You can see that here.

The best source for the public to do backtesting is the Portfolio Visualizer [Froogal Stoodent note: I can second that recommendation!]. Another amazing source for past data is IFA.com.

FS: Any other points or comments you’d like to make?

Paul: The keys to a lifetime of successful investing are to first know yourself (your own personal balance between return and risk tolerance); second, to have realistic expectations for returns and long periods of underperformance; third, start as early as you can; fourth, invest automatically via dollar-cost averaging; fifth, keep expenses low and diversify as widely as possible.

Index funds are a great way to accomplish this, with low expenses and wide diversification all in a single fund.

Furthermore, understand that the luck of any particular time period can make a huge difference in returns, so be ready to work a few extra years if the market doesn't perform as expected.

This set of tables represents our best 2020 research: https://paulmerriman.com/wp-content/uploads/2021/01/2020-Year-End-Podcast-Charts.pdf

The Telltale Charts are part of that; readers can download and review them. I think people will find them very helpful! This video explains in good detail: https://www.youtube.com/watch?v=8trjvyV7V0g

If teachers or students would like a free PDF of We're Talking Millions, they can fill out the form found on my website here. You can find the contact information at the bottom of my homepage, paulmerriman.com.

Otherwise, people can find the book at Amazon, where [so far] every single one of the written reviews is a 5-star rating! Clearly, the book is connecting with a certain type of investor.

FS: Paul, thank you so much for sharing your time and expertise on this humble blog! And remember, dear readers, that We’re Talking Millions! 12 Simple Ways to Supercharge Your Retirement is available now.