Sherwin Presley Brown - Safer 401(K) Investing

Safer 401(k) Investing: How to Protect All Your Investments from Wall Street Greed and the Government copyright 2012 by Sherwin P. Brown. All rights reserved. No part of this book may be reproduced in any form whatsoever, by photography or xerography or by any other means, by broadcast or transmission, by translation into any kind of language, nor by recording electronically or otherwise, without permission in writing from the author, except by a reviewer, who may quote brief passages in critical articles or reviews.

ISBN: 978-1-59298-574-6

eBook design by Mayfly Design

First Printing: 2012

Beavers Pond Press, Inc.

7108 Ohms Lane

Edina, MN 55439-2129

(952) 829-8818

www.BeaversPondPress.com

To order, visit www.BeaversPondBooks.com

or call (800) 901-3480. Reseller discounts available.

In loving memory of my father, Thomas Brown, who walked over 100,000 miles to and from work in St. Annes Parish, Jamaica, to provide for his family. Even though he could not read or write, his goal was that each of his nine children would have a full belly and an educated mind. He was truly my best friend and one of the kindest and most honest men I have ever known. In all the years I knew him, I never heard him say a mean or unkind word about any other person.

Introduction

For more than a quarter century now, I have been investing in the stock market and advising clients on how to build, and preserve wealth. I have enjoyed heights of success that few financial advisors have reached, and I have accumulated a great deal of hands-on, up-close-and-personal investing information that I would like to share with you. Rather than speaking in the language of finances, I will break down the process and my philosophies into simple fundamental building blocks, leaving little room for ambiguity on the way.

I believe that very intelligent and decent people have been led astray for years by handsomely dressed brokers promoting lofty investing ideas involving derivatives, hedge funds, and other slick-sounding strategies. Rather than admit ignorance, many investors simply nodded their heads in blind agreement and walked the gangplank to fall into the dark, turbulent waters of a broken economic paradigm. The sharks awaiting them therethe firms controlling their hard-earned savingshad invested their money in all the wrong places and laughed all the way to the bank to deposit their fees and commissions. In the hindsight of this post-bust economy, it is clear that the majority of investors did not have a sufficient understanding regarding what the brokers were actually doing with their money. Sadly, the staggering personal losses were avoidable with the right advice.

When asked for the secret to success in the market, JP Morgan once said, Buy low, sell high. I have refined this sage advice with the advice to Buy high, sell higher. I will take you back to basics. I will strip down all the song and dance theories about derivatives, mutual funds, and other financial hijinx, and return to the simple, wise, old school style of investing that protects your principalguaranteed!while pursuing growth and the security and future you deserve. The books that fill library and bookstore shelves proclaiming new strategies for new times are just more of the same hogwash that the kings of Wall Street have been promoting in their self-interest. Save your money and read a good novel. Return to the basics and enjoy life.

Sherwin P. Brown

Chapter 1

A Wealthy Money Mindset

I dont want to be rich;
I want to be wealthy.

Sherwin P. Brown

I would like to make a deal with you: If you want to read this book and profit from the information you will glean from it, you must first be willing to consider establishing a particular mindset. If you do that, I promise you will be on the high road to safer 401(k) investing. I have made my own fortunes with this information, and I have witnessed the successes and errors of clients and other investors who either used it or ignored it. I have also made my mistakes and, importantly, learned from them. In other words, I have been to the battlefront, and I am reporting back to you with a full account so you wont find yourself lamenting over lost opportunities and wasted money.

The above mindset is crucial because no matter how much great advice I offer, financial success simply cannot come without a proper attitude about having and holding money in the first place. Ive seen people come into hundreds of thousands of dollars only to fall back to their original, pre-windfall position within a frighteningly short period of time. Some write it off to bad luck or self-destructive habits, but people who see themselves as poor will revert back to being poor even after fate dumps a mountain of money in their laps. Its all in the mindset.

Conversely, I have seen very wealthy people who are consumed with managing their money to the point of zealous preoccupation. Tending to be miserly, they often seem to be generally unhappy souls. One such client found no joy in my report that a stock I picked for him was up 600 percent in six months. Yeah, he responded, but that other stock is down 7 percent. Have you ever noticed the linguistic similarities between the words miserly and miserable? Its no mistake. Being miserable and worrying destroys the whole point of having money in the first place: being financially secure and being happy and carefree.

Other people have a winning mindset about money and it flows to them easily. They are not preoccupied with wealth and they dont worry about making a ton of money or lose sleep when theyre a little on the downside. Content either way, these are the people who routinely donate 10 percent or more of their income to charity. A universal law of reciprocation rewards these kind souls with windfalls, good luck, and happiness. Their mindset about money attracts more money, yet they dont subscribe to the famous saying money cant buy happiness.

Thats one of the most debilitating financial sayings that I hear and its one that too many folks hide behind as an excuse for financial irresponsibility. Of course, nothing can buy happiness because happiness comes from within; but as a medium of exchange, money can buy you food, shelter, travel, education, fulfill your desires, and even attract the right mate. If you pretend to believe the money cant buy happiness philosophy, try being flat dead broke for a year or two.

There is one more aspect of the winning financial mindset: Be a long-term thinker . A short-term thinker is like the alcoholic who spends his last five dollars on a drink rather than saving it for a meal the next day. Ive had clients walk into my office who were lifelong short-term thinkers and who had no money saved to speak of at age sixty. But, they were ready to change, ready to open their minds and accept a new way of thinking about money. Together we managed to turn their financial lives around, and allowed them to retire with secure dignity, all because they changed their mindset.

For example, a couple in their early sixties came to me with a mere $15,000 to invest. Knowing that they had no choice but to take sound advice and resolute action, within five years their investment portfolio had grown to over three-hundred thousand dollars! Its never too late. So, with these thoughts in mind, lets start making some money!

What This Book Will Teach You

Every investor has somehow been burned and lost money. Not knowing what to do, they often followed the crowd, buying when everyone was happy at market highs and panic-selling when everyone was unhappy in the market. A winning mindset and sticking to sound, well-proven investment principles will allow you to peacefully weather the storms and become wealthy for the long term. Through this book you will learn about: