#3: Beat the Market Pt. 3 - Strategy building blocks, How to Get Rich, Personal finance philosophies, Meaningful work, Forgotten GFC lessons

This week we're moving on to Part 3 of A Simple Strategy to Beat the Market (if you haven't done so, read Part 1 and Part 2 first).

Beat the Market (Part 3) - Building Blocks of a Market-Beating Systematic Strategy

In this part we'll go through the process of building up our "Beat the Market" strategy, which I believe is a far superior one to the alternative of just "Buying and Holding the Index" by owning the SPDR S&P 500 ETF Trust (SPY).

Read Part 3 to learn about the rules of the strategy, what ETFs we are using, and its historical performance.

NOTE: This is not financial advice. Results are hypothetical, do not indicate future results, and do not represent returns any investor actually attained. Please read the Disclaimer page for more information.

How to Get Rich by Felix Dennis (Wealth Creation Book Review)

You should only take advice on getting rich from rich people. Felix Dennis (1947-2014), the founder of men’s magazine Maxim and the publisher of over 50 magazines such as The Week and Auto Express, meets that standard.

Besides having been on the list of the UK’s richest people, Mr. Dennis has also lived a colorful life – by his own admission he estimates having spent $100 million in just one decade on drugs, drink, prostitutes, and a decadent lifestyle.

His book, How to Get Rich, contains his frank, no-BS advice on how to get wealthy (tip: own as much equity as you can). He also shares handy pointers on starting up, improving your company’s cash flow, negotiations, managing people, and staying rich. Besides being a successful entrepreneur, Mr. Dennis was also a prominent poet, and it shows in the poems (both self-written and quoted) sprinkled throughout the text.

Read this book and learn how to progress from being part of the “comfortable poor” ($2 million to $4 million of assets) to rubbing shoulders with the super rich ($2 billion and over of assets), and be tickled by classic lines such as “If it flies, floats or fornicates, always rent it. It’s cheaper in the long run.”

Key Takeaways

  1. You will never get rich if you care what other people think, don’t work hard, are unwilling to fail, and lack self-belief.
  2. To become rich you must own as much equity of a company as you can.
  3. “If it flies, floats or fornicates, always rent it. It’s cheaper in the long run.”
  4. Becoming rich will not make you happy. It is a burden and will lead to greater isolation.

Intrigued? Read the full review and top highlights.

Worthwhile reads

Personal Finance Philosophies

"Extreme adherence to an investment strategy is dangerous in a world that changes all the time, so an important question to ask when things aren’t working whether you’re being patient or stubborn." - Morgan Housel

What Makes Work Meaningful — Or Meaningless

"...our research showed that quality of leadership received virtually no mention when people described meaningful moments at work, but poor management was the top destroyer of meaningfulness." - Catherine Bailey and Adrian Madden

Seth Klarman: The Forgotten Lessons of 2008

"At equal returns, public investments are generally superior to private investments not only because they are more liquid but also because amidst distress, public markets are more likely than private ones to offer attractive opportunities to average down." - Shane Parrish