Paul Merriman - 101 Investment Decisions Guaranteed to Change Your Financial Future

How To Investseries

101 InvestmentDecisions
Guaranteed to Change

Your FinancialFuture

Paul A. Merriman

with Richard Buck

Published by Regalo LLC

Copyright 2012 PaulMerriman and Richard Buck

Smashwords Edition

All rights reserved. Except as permittedunder the United States Copyright Act of 1976, no part of thispublication may be reproduced, or distributed in any form or by anymeans, or stored in a database or retrieval system without priorwritten permission of the publisher, except by a reviewer who mayquote brief passages in a review.

ISBN-

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This publication isdesigned to provide accurate and authoritative information inregard to the subject matter covered. It is sold and otherwisedistributed with the understanding that neither the authors norpublisher is engaged in rendering legal, accounting, securitiestrading or other professional services. If legal advice or otherexpert assistance is required, the services of a competentprofessional person should be sought. From a Declaration of Principles Jointly Adapted by a Committee ofthe American Bar Association and a Committee of Publishers andAssociations

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All profits from the saleof this book and all books in the How To Invest series aredonated to educational non-profit organizations. For moreinformation, visit http://www.www.PaulMerriman.com

Editorial &Marketing: AyshaGriffin

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Acknowledgements

Over the years I have learned aboutinvesting from many wise people (and a few foolish ones as well),and I am forever indebted to them in more ways than I cansay.

In regard to this book, I offer aspecial thanks to Bob Marty, an independent TV producer, who wasresponsible for one of the greatest teaching opportunities I everhad. Bob, along with the wonderful people at PBS, made it possiblefor me to speak to millions of their viewers in Financial FitnessAfter 50, a 90 minute pledge special that ran in2011-2012.

I would be negligent if I didnt tellyou that you would not have this book in your possession withoutthe patience and wisdom of my wife, Suzanne, and the creative,diligent work of Aysha Griffin and Richard Buck. If this book helpsyou, then you should be thankful that they are on myteam.

Paul Merriman

Contents

Introduction

This workbook is written to help afull range of investors, from first-time investors to thoseplanning for early retirement.

The bulk of this workbook is made upof my views on 101 decision points that can and often do add orsubtract untold numbers of dollars to the investments we count onto keep us financially fit. Many of these choices can also have aprofound effect on our peace of mind.

Some of the subject matter will befamiliar from my books. However, many of the topics in thesequestions are not covered in the books at all, and others get muchmore detailed treatment here. By breaking this up into specificdecisions, I hope that I have made it easy for you to quickly findand focus on issues that matter to you, while you skip over othersthat might not apply.

If you have a question that isntaddressed in this workbook, Ill be happy to help you with theanswer. Feel free to email me at pm@paulmerriman.com.

I also invite you to visitand sign up at my website for current mutual fund and ETFrecommendations, podcasts and articles at paulmerriman.com .

Please note that all profits from thesales of my books are donated to educational non-profitorganizations.

Paul Merriman

101 InvestmentDecisions Guaranteed to Change YourFinancial Future

Every decision in this book is one youwill make or have already made, whether you know it or not. You canmake these choices by default, not realizing youre doing it. Oryou can make them by design, which is how I recommend you doit.

I believe that every item here has thepotential to add at least $1,000 to your wealth. Most can add 10times that much, and some could add $100,000 or more. Together,they can add up to millions of extra dollars for you and yourfamily over the years.

The choices you make are guaranteed tochange your future. The future is unknown, and I cant guaranteethe results youll get from these decisions. But the followingbrief discussions are all based on lots of history, and I believethat history indicates my recommendations have a high probabilityof success.

These decisions are designed to helpyou adopt the very best practices of investing, in easy steps. Ihave tried to break each item down to the basic elements so it iseasy to deal with.

This book is not an essayfor you to read and then put away. This is a workbook, and itsgreatest value lies in the extent that you put it to work for you.In the print edition, we were able to format check boxes at the endof each item, so you could indicate whether or not the item appliesto you and, if so, the priority you assign to it. For our eBook readers, we have created a specialWorksheet that you can access at our website:

http://www.paulmerriman.com/101InvestmentDecis ionsWorksheet.pdf

I suggest you go there,print out the Worksheet, and use it as you read this book. For eachof the "101 Financial Decisions," there are four options for you tocheck or not. The first line will let you indicate whether or notthe item applies to you and calls for some sort of action. If youcheck that, you should also check one of the next three boxes,indicating the priority you assign to it.

A priority means youthink that you should put this item near the top of

your to-do list.

B priority means youbelieve theres strong potential benefit for you, but

other things are more urgent or havegreater immediate potential.

C priority means this isnot a task that calls for action right away, but

its something you want to rememberand revisit when you can.

Part 1: The Basics

Some of these topics seem extremelybasic. You may think theyre not worth your time. But remember, Ibelieve that each one is potentially worth at least$1,000.

1. If you have moneybeyond your immediate needs, will you save it or spendit?

Save vs. spend is the most basicinvestment decision you can make. But before you dismiss this asnot worth your time, think about Starbucks for moment. I havespoken with dozens of young people as they buy drinks at Starbucksor carry them back to where they work. Most of them tell me theyare not maxing out their retirement plans because they dont haveenough money. Many say they make three Starbucks runs a day, eventhough free coffee is available at their offices. Many also buytheir lunches every day.

A little math would tell them theyrespending an unnecessary $50 or more every week. With a relativelysimple change in their habits, they could easily add $2,500 a yearto their retirement plans. They would probably be astonished toknow what that savings could do for them. Invest $2,500 a year at 8percent, and in 40 years youd have nearly $650,000 (If you makethe right choices in the other decision points in my list, you canprobably boost your expected return to 10 percent. That would makethe $650,000 worth more than $1 million).

Although I dont know you, I am prettyconfident that you are regularly spending at least some money thatyou dont need to spend. Can you change a few habits and beef upyour savings?

2. Should you save intax-deferred accounts or taxable ones?