Sun, Nov 03, 2019
By Ranvir Biki Mohindra
One of the biggest problems with investing in the stock market is the emotional roller coaster that one experiences as the market goes up and down. For this reason, many individuals buy and sell stocks at the worst times and have much lower returns than the market averages.
Most of us are aware that there are many great approaches that work in the short term … like the ten-bagger new company stock, the real estate that doubles in value quickly, and the historical rise in value for the great companies of our time such as Apple, Amazon, and Facebook. But these are often counterbalanced with the great losers of our time such as Sears, JCPenney, Countrywide Financial, Enron, AIG, Lehman Brothers, Smith Barney and many more. All of these companies were stars at one time, but failed at another time. After riding the roller coaster of ups and downs in the financial markets, I decided to look for something better.
I asked myself that there must be some strategy that allows your money to grow safely and effortlessly. I began my search for a strategy that was geared to my temperament and answered all the following questions:
•What is the safest path to having money and making money, over the long term, for somebody who is risk-averse?
•Is there a way to grow wealth predictably without losing sleep?
•Is there something out there that is simple?
•Is there something that is foolproof and does not involve either luck or skill?
•Is there something that can operate on autopilot?
I spent a lot of time and effort to find a strategy that met all the above criteria. There were many people who offered products and approaches, but none met the above requirements. These products looked good on the surface, but they all had a dark side.
One example of such deceptions were different kinds of annuities. They promised all kinds of financial security but hid the dark side and the high costs associated with these products.
Finally, I found a strategy that seemed to meet all the above criteria. But instead of being happy, I became very skeptical and asked questions like how come I never heard about it for all these years? And if these products are so good, why are they hidden from the public domain.
Then I read a book titled Bank on Yourself (BOY) by Pamela Yellen that gave me satisfactory answers to all these questions. She fully explains this unorthodox approach and why it is hidden from the public. Then she outlines in practical terms, how anyone can get started on this path and build wealth over time, without the normal perils of investing in conventional products like stocks, bonds, and real estate.
I decided to put a small part of my assets to test Pamela Yellen’s strategy. To my surprise, it worked, and it did not have hidden surprises.
I adapted her approach to fit my situation and mindset (and that of most South Asian immigrants). It has performed for me better than expected and I have gradually increased my investments in the system. I am proud to tell you that it continues to work and now I sleep easier and every single day my wealth increases and so far, there have been no exceptions.
To my surprise, I found out that these products have actually existed for nearly 100 years, but they have been limited to the domain of people who are ultra-wealthy. These products have never had a single down year in their entire existence! Neither in the depression of 1929 nor in any of the financial busts that have followed. Even 2008 was a positive year for them! How is this possible? I will explain this in a future article.
When I got to the end of the discovery, I found that Warren Buffett had already gained this wisdom and had adapted it to his portfolios, which consist of very large investments.
Since my situation was different, I found a way to adapt it to more modest wealth levels, that applies to me and most other ordinary people.
I am not a salesperson and do not sell any of these products. I have worked hard to learn about these products and have them designed specifically for my needs and are optimized in terms of costs and benefits. I have helped many people build their own plans suited to their needs. I have been asked if this approach can double a person’s wealth. My answer is that in this system you do not need luck and with some patience and time it can do much better than that. I will be explaining more about this amazing approach to building wealth in future articles.