At the core, however, there are basic principles that make up the essence of personal finance and apply to nearly everyone. Of the roughly 80,000 words I’ve written in this space, the ideas that follow are the ones that have the highest probability of being useful to people working toward financial freedom.
?”To achieve satisfactory investment results is easier than people realize; to achieve superior results is harder than it looks.” Benjamin Graham wrote this in the fourth edition of “The Intelligent Investor” in 1973. It is timeless.
Few people need to beat the return of broad markets to achieve financial freedom. Simply capturing the market return with low costs and a diversified portfolio will get most people where they want to be. It doesn’t require picking just the right investments, which increases your risk of picking the wrong ones.
? Saving at least 10 percent of your income throughout your working life will go a long way toward making you financially secure when paired with prudent investment practices. The later you start saving, the higher your savings rate will need to be.
?Where you can’t predict, plan. Investment returns, life expectancy and health-care costs are among the many influences on your life you can’t accurately predict. But you can plan for a range of possible outcomes and give yourself a solid foundation to make decisions from as you move through life.