Conclusion

Stop for a moment and consider how much life has changed in the past hundred years. Heck, consider the pace of change in just the past couple of decades. For a bit of perspective, I graduated college in 1996, and throughout the course of my undergraduate studies, I never owned a computer. I also never logged onto the Internet. And of course, no one I knew had a cell phone. Globalization wasn't even really a thing yet, and computerized trading was only in its infancy.

Flash forward 20 years and the thought of a college student without computer, cell phone, and Internet access is literally unfathomable (at least in the developed world). And in the financial markets, the concept of human beings shouting at each other to execute trades seems archaic. In fact, humans are largely superfluous to institutional trading, having been replaced by computers. Increasingly, humans aren't even programming those computers, relying instead on artificial intelligence.

SOURCE: Wikipedia.

Many of the innovations we now take for granted have enhanced the world of the individual investor. Lower commissions, greater transparency, and more equal access to information have all served to empower you. Yet, buried deep within these developments are the seeds of trouble, because a byproduct of the world we live in is that it is harder than ever to resist the Siren's call of easy profits and overnight riches. And as always, humankind's primordial brain conspires against you while the constant flow of information makes it ever harder to, as Jack Bogle said, “Don't do something, just stand there!”

Of course, the media is there, too, hungry for eyeballs and willing to feed your behavioral biases in their ongoing quest to build a bigger audience.

Hopefully this book has convinced you that the surest path to financial success lies in ignoring the noise, resisting the urge to do something, and following a patient and disciplined investment approach. Remember, the game of investing is like the NBA; there are very few All Stars, and only one Michael Jordan. If you're five foot eight and can't jump, what are the odds you're going to be a star? And, to be honest, do you really even belong in the game?

But the good news, as you've learned, is that financial success doesn't require you to play the game, or to compete with the pros, because success can be achieved by systematically following a long-term financial plan.

Here are the principles you must accept, if you want to know financial freedom:

• One: The world of investing has changed, both for better and for worse.
• Two: When confronted with a game you can't win, finding a new game to play makes a lot more sense than trying to beat the pros at a game they've rigged.
• Three: Pundits, analysts, and so-called experts almost all have very spotty records when it comes to successfully predicting the future.
• Four: Examine what history teaches you about the risk-and-return characteristics of various types of securities.
• Five: Commit to planning for your future by getting specific about what your goals are and what steps are necessary to achieve those goals.
• Six: Determine the required rate of return to meet your goals and build a portfolio to get you there with the least possible risk.
• Seven: Allocating among countries, asset classes, sectors, and securities can increase your potential returns while reducing your risk.
• Eight: Taxes will likely be your largest future expense, and knowledge is the first step in reducing that expense.
• Nine: While you can't dictate the direction of markets, you can control how much of your returns you keep rather than share with your partners at the IRS.
• Ten: Understanding your behavioral biases can help you take steps to control them.
• Eleven: The media's job is to play to your weaknesses in an effort to attract viewers while your job is to secure your financial future.
• Twelve: Financial success is possible, but only if you avoid risky or high-commission products sold by those without your best interests in mind.
• Thirteen: Bear markets will happen, but you can survive by setting a portfolio mix you can stick with and then adjusting as needed to stay on course toward financial freedom.

So, there you have it: a set of simple principles designed to help you achieve financial freedom.

Remember, though, that simple doesn't always equate to easy. Your emotions, fueled by volatile markets and fanned by media headlines and public sentiment, will regularly challenge your ability to stay the course. When you are tempted to abandon time-tested principles in favor of the urge to do something, refer back to your written financial plan or reread the lessons found in this book. Or better yet, go to the park, or walk the dog, or spend time with friends, or do any one of a thousand more productive activities than staring at the day-to-day gyrations of your portfolio.

And when all else fails, focus on the most important lesson of all – namely, that the principles in this book are not theoretical. For many decades they have worked for countless investors across a range of market and economic environments.

You aren't charting a new course when you walk down this path. All you're doing is following the precise steps taken by generations of people just like you who found financial freedom through a straightforward plan that ignored the mayhem around them and stayed true to a set of time-tested principles.

And with a willingness to learn from the past, as well as a bit of intestinal fortitude, you, too, can join the ranks of those who've found financial freedom.

Good luck!