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The biggest lie since fidelity was introduced into the French wedding vows is that you need to have lots of money to invest in the stock market. You can invest small amounts regularly. In your journey to financial freedom, you need to invest your monthly savings into the stock market.


Many people manage to save, but then they invest their savings in the wrong place. They put this money into a low risk, low return fund, or instrument for their retirement. After all, this is your nest egg – the money that you will be using in your twilight years when you have more hair growing out of your ears and nose than growing out of your head. Advisers encourage you to be conservative and play it safe. This is the worst suggestion since Abe Lincoln's suggested they go out for dinner and a show. While it is true that as you approach retirement you need to ratchet down your risk, in the years and decade leading up to retirement you need to strap on the turbocharger and grab your helmet.


To understand the implications of saving for retirement, let us do the numbers. Savers normally invest in funds and instruments where the returns are linked to interest rates. In the 1980s, long term interest rates in the United States were around 15 percent. Today, this rate has plummeted to around 1 percent. Let us now understand the impact of this structural downward shift in interest rates on the returns for savers.


If you had saved $100 per month, at an interest rate of 15 percent for 30 years, how much would your savings be worth? The answer is $692,328 ignoring tax and inflation. If you save $100 per month, at an interest rate of 1 percent, how much will your savings be worth in 30 years? The answer is $41,962 ignoring tax and inflation.


That is brutal! Imagine saving religiously for 30 years and barely having enough money to buy the bottom of the range Tesla!


You need to INVEST for Retirement


At Rebel Finance, one of the objectives is to train you on how to become a master investor replicating the strategies of market gurus like Warren Buffett. But let’s assume you do not have the time or the inclination to embark on this quest. Let me share with you a simple strategy that you can implement today.


Step 1: Relax

The stock market brings out the worst in us because people think they can use it to get rich quick. Most people are terrified of the stock market because it exhibits wild and volatile swings and this is true – in the short term. The stock market, over the longer term, tends to be more predictable and benign. Your first step is to recalibrate your opinion of the stock market and take a long-term view. You need to be patient and you need to be religiously disciplined in your investment.


Step 2: Monthly Contributions – Annual Consultations

Every month, you need to commit to investing a minimum amount of cash into the stock market and you are only allowed to check your account statement once per year.


Step 3: Choose a Low-Cost ETF

I hate ETFs because they are too diversified and at Rebel Finance we discourage investors from committing their money to overly diversified instruments ( But we also understand that not everyone has the desire or time to analyze individual stocks, which means an ETFs can be a powerful financial tool. I would recommend a broad-based country or global ETF such as the SPY or IVV.


Step 4: At Least $100 a Month

All you need to do is invest $100 per month. To understand how extremely attainable $100 per month is, I did a quick Google search on what $100 can buy you these days: Eight or ten movie tickets, 10 months of Netflix, four or five new movies on DVD, fifteen used DVDs at a yard sale, lunch for four at a fairly nice restaurant, 40 cheap burgers or 90 candy bars. Over the past 30 years, the Standard and Poors 500 Index has delivered compounded returns of approximately 10 percent. This is better than a poke in the eye with a blunt stick and one needs to take into account that this return includes three major stock market crashes – the bubble bursting in 1999/2000, the collapse of Lehman Brothers and the Great Recession of 2008, and the Coronavirus pandemic of 2020. So how much would your 30-year religious investment in this broad-based US stock index yield? The answer is $226,048. That is inordinately better than investing in a savings account or Treasury bonds.


How much would you need to invest every month to be a millionaire in 30 years, 20 years, 10 years, and 5 years?


Assuming the same total returns of the Standard and Poors 500 index, here are the monthly investments that will yield $1 million after the stipulated period  


30 years: $442

20 years: $1,316

10 years: $4,881

5 years: $12,913  


The Two Worst Long Term Investments

 Ask any financial advisor for their top five long term investments, I would wager that the majority would include retirement annuities and your house.  What would you say if I told you that these were the WORST long term investments? You may think that I have gone bonkers, joined the circus, and am now bouncing jelly beans off my belly and pulling live pigeons out of my ear. But let me explain.  




I hate annuities

Ken Fisher


Retirement annuities are crap investments. The only beneficiary is the annuities salesman. According to billionaire investor Ken Fischer, if you invest $1 million investment it will help to put a kid through private college. The problem is that it is not your kid. It is the kid of the annuities salesman. Fisher says you would be better off cutting a check directly to the salesperson and then investing the balance directly in stocks and bonds.


Do not be fooled by the sales rhetoric. Annuity salespeople will regale you with the tax benefits, the power of compounded growth, the discipline of saving (a lie that we have debunked), supporting your dependents, and long term stability. If you are financially educated and disciplined, you can do better with direct investments.


Annuities are black-box investments – there is no transparency and accountability of results. The fees are bordering on criminal. Moreover, when you retire with that annuity, you will get a stream of income akin to a quaint Scottish brook. You deserve the whitewater rapids on the Zambezi River.




Repeat After Me: Your House Is Not An Asset

Robert Kiyosaki


The American dream is built on homeownership. 2008 financial has its roots in the 1990s. In 1995, Bill Clinton took time off from using Monica Lewinsky as a human humidor. He rewrote the Community Reinvestment Act. This pressurized banks to lend to low-income neighborhoods and facilitated the rapid increase in subprime lending. Clinton did this to strengthen his political base in those lower-income households. He made it easier for these families to attain the American dream and thereby increased the probability of being reelected in 1996. Bill is a cunning fox.


Homeownership enslaves people financially.  According to Zillow, one-third of homes in the United States in 2018 were "free and clear" - they were not encumbered by a mortgage loan. Two-thirds were encumbered. There is nothing like a 30-year mortgage bond to tie you down financially. If you have a mortgage and a job, the pressure to stay in that job until that death pledge has been paid off is immense. Mortgages are the single biggest reason standing in the way of financial freedom. To make matters worse, most people believe their home is an asset.


Robert Kiyosaki, in his book Rich Dad Poor Dad, says the asset/liability test is simple. Assets put money in your pocket. Liabilities take money out of your pocket. If you living in a house, and it is mortgaged, you are paying rates, taxes, and interest on the loan. It is a liability. If it is "free and clear" it is still a liability. You still have to pay rates and taxes, not to mention lights, water, and general maintenance. But property prices always go up. That is a fallacy. Americans who bought houses before the financial crisis of 2008 will paint you a different picture. Real estate is like any asset – its price can rise or fall and if you are banking on your house price appreciating in value, then welcome to the world of speculation. Real estate is a very powerful income-generating asset, but it is only an asset when it generates income and puts money in your pocket.

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