Rescue Your Money
         by Ric Edelman

 It’s really simple. 

Isn’t it?

 Step #1:
  Work hard your entire adult life, save $100,000 or more and invest it wisely in a variety of sectors: CD’s, bonds, real estate, the stock market (hopefully mostly blue-chip stocks) 

 Step #2:
Wait to reap the rewards of your patience and hard work.

Now let’s cut to a scene where an elderly couple looks at their online balance sheet and realizes that the 100k they invested in 5-year CD’s is now worth about 65 thousand dollars.

 What happened?!

 Didn’t take inflation into account?
      Transaction costs?
      Bought too late, sold too soon?
      OR, and this may be one of the main roots of portfolio failure, you just didn’t know what you were doing? 

  On November 14th 2012, a headline in Forbes Magazine warned: ‘ market sell-off after Obama’s re-election no accident; recession coming’. The article stated: ‘Now that the election is over stocks are dropping with no bottom in sight. This is no accident, given investors’ fears of higher taxes and continued big-spending…we are headed for a recession.’

 …the very next day after that article appeared…November 15th, 2012, a post-election stock rally began. As you may recall, stocks rose throughout 2013, with the S&P 500 posting again nearly 30% for the year—it’s best in 18 years. The Dow Jones Industrial Average ended 2013 of 26.5%, and the tech-focused NASDAQ a whopping 38%. The increases continued, though to a lesser extent, through 2014.”

• Rescue Your Money, ch. 3

 Author Ric Edelman doesn’t make you wait until the end of the book to let you in on the Big Secret to making a profit on your investments, rather than seeing them fall prey to the ravages of time and taxes (like the couple just mentioned). Instead, he shares his knowledge about wise investing right from the git-go, in the first few pages of this book. 

 That’s the beauty of Rescue Your Money. We are not called on to wrap our heads around the outermost reaches of economic theory or grasp the innermost workings of financial markets so well that we would be quite capable of holding our own in a discussion with hedge fund managers or high-earning MBAs.

 Instead, the author offers clear, simple and practical suggestions about how to navigate the market and see your investments prosper. Rescue Your Money,  with its emphasis on a smart, steady and patient approach to investing, may be particularly useful for younger investors, since they have plenty of time to work out their investment learning curve.

 The fact of the matter is:

If you´re a Millennial or member of Gen Z, thereś a good chance youŕe an investor.

If you are a Millennial woman, there is a good chance youŕe doing better in the market(s) than your male contemporaries:

¨…73% of Gen Z investors, 66% of millennial investors and 67% of investors ages 18 to 40 overall own stocks.¨
– ¨Millennials and Gen Zers Are More Invested in the Stock Market Than Other Financial Assets, Including Crypto¨
–Yaёl Bizouati-Kennedy on Yahoo.com..11/04/21

¨There’s good news for the growing share of women pursuing investing: Despite their lack of confidence, women investors tend to outperform men. 

Just over two-thirds of women now invest outside of retirement, up from 44% in 2018, according to Fidelity Investments’ 2021 Women and Investing Study, which polled 1,200 women. Broken down by generation, that share is even greater among Millennials, at 71%. Among Gen Xers, it’s 67%, and among Baby Boomers, it’s 62%.¨
– ¨With more money saved, Millennial women show greater interest in investing¨
– Caitlin Mullen, Bizwomen contributor (https://www.bizjournals.com/bizwomen).

Sound interesting?
Get that cup of cold brew coffee going and read on.

Edelman lets us know right away what the Iron Law of Investing is:

Buy Low and Sell High. 

    Okay. Now we know what to aim for…optimize every penny and look for the right opportunity. But to do that, you have to be ahead of the game. The first step—and this is where the author really earns his keep, in letting us know which assumptions and preconceptions are keeping us from making our stock picks work—is to get rid of those attitudes that are keeping us down. Most importantly, we need to:

 Get Real!

 That means don´t get carried away with useless KPIś (key performance indicators).Youŕe not trading percentages. You’re trading money! As the author reminds us, if you think your investments are successful because they’ve lost only 30% of their value while the market as a whole has lost 35%—even though you lost money—you really need to consider (or at least auditing a class in ) Investing 101. And that’s what this book is; a return to basics and an invitation to act from a place of patience,  persistence and a willingness to do your due diligence rather than succumb to the gambling fever that leads so many investors to lose their hard-earned cash in financial markets.

 The problem is, according to the author, that so many of the millions of people who have become investors—thanks to the ease and availability of online trading —allow themselves to be seduced by the twin devils of fear and greed. Instead of buying when the price is right, they wait till the investment becomes front page news. Then they jump on the bandwagon after the price has gone way up. Then, when the price starts to seriously dip, they sell—at a loss—in a fit of panic

  Rescue Your Money stresses fundamentals, What makes this book stand out is its insistence on the need for discipline and the willingness to constantly learn for anyone who wants to succeed as an investor. His starting point seems to be this: if your perspective on something’s not quite right, then everything you do will be subject to failure—no matter how wisely you intend to act. Underlying his take on what it takes to be a successful investor is this: for little fish to reap a profit from their investments, they have to think and act like big fish as much as possible. The brave heart of the warrior has its place in all things that involve risk. Still,  it is  the cold, clear head of the well-trained and highly disciplined soldier that you want to guide you through the rough and tumble of the financial market. Or, as someone said about what it takes to make it as an online trader: “Whatever else you have going for you, when it comes time to execute a trade, you have to be able to click on that key(s) or that mouse button without hesitating or letting your emotions get the best of you.”

 The wise old (and in some cases not-so-old) owls of the market  are just waiting in the wings with cash in hand to gobble up those severely depreciated bargain stocks that will return a great big profit after they’ve recovered from the downturn. They are able to spot those buy-in opportunities because they’ve done their homework. If their stocks look like they’re tanking or going to tank they will have an exit strategy in place that will spare them losses beyond what they’re ready to bear.

 His success as an investor is not based on a rare and uncanny ability to guess better than most when the top of a bull market or a bear market’s low point. In fact he goes deep by giving us some useful advice on something that is basic to investing This is where he mentions the two “truths”— as these fallacies are so often regarded by unwary investors— that keep people from investing successfully.

False) Truth #1:

Stock Prices Rise and Fall

In order to make this work for you, you have to be able to time the market. To do so investors “follow fads, trust the media, rely on so-called experts, or make  big bets on blue chip stocks or hot sectors.” (Ch. 4 {mention title of ch. 4})

 Actual Truth #1: 

 Over the course of a 66 year period (1956-2015) and 11 downturns, the market swung back boldly into the black, gaining somewhere between 56 and 229% of its value after losing somewhere between 14 and 52% of it. The market is not the roulette table at Bellagio’s. In fact, looking at your portfolio every day (or even worse, several times a day) is a big mistake says Mr. Edelman. In fact, according to research, people who do so tend to do worse than those who do not! 

The solution?

Don’t panic and sell. Instead, how about working with the 15 year cycle as analyzed by Ibbotson Associates?  

 False Truth #2: 

The stock market is risky, volatile and unpredictable.

 Actual Truth #2: 

Yes it is (risky, volatile and unpredictable), if you want a quick return. On the other hand, the NYSE’s value today is 100 x greater than it was 100 years ago.

 Rescue Your Money is too deep and too chock full of information to present it all here, but there is one thing that is basic and involves a very interesting suggestion meant to guide us into the right “take” on buying and selling:

Now author Edelman has something interesting to say about making your portfolio grow (in Rescue Your Money ch.  )

Sell High

Buy Low

 What’s going on here?!

 Right in the first chapter of the book he tells us to buy low and sell high. Is he now telling us to do the same thing but different? Has the author decided to forsake the serious business of market analysis for the lols of the brain-teaser market?

 No. Not at all. 

 What he means (ch. ) is. Just as you would do well to consider the cost of your most basic raw material for your backyard garden – seeds, fertilizer etc. – you would likewise do well to consider the source of your investment income. As in all things, planning ahead in a systematic way will get you a lot farther than acting on the spur of the moment. 

 Selling high and buying low are two sides of the same coin; or, if you prefer, the x and the y  of a mathematical equation. If you treat selling high as a means of raising capital for further investment, then you are helping to solve one of the biggest problems that individual investors face—having a steady and reliable source of income that will enable you to be ready to buy right at the right time with income that comes from  your investment rather than from your pocket (just like the biggest institutional investors…aka big fish)!   

 Like fellow investor and investment consultant Robert Kiyosaki,  Ric Edelman is that rarest of combinations: a thinker, a doer and a teacher. Heś helped to make billions for his clients, has the ability to take something that is hardly an exact science and explain it as clearly as possible, and emphasizes the need to correct wrong attitudes and assumptions, since they underlie much of the failure of your average investor to see his or her investments return a profit.