The Stoic Path to Wealth: Ancient Wisdom for Enduring Prosperity - Hardcover

Foroux, Darius

 
9780593544150: The Stoic Path to Wealth: Ancient Wisdom for Enduring Prosperity
Hardcover
ISBN 10: 0593544153 ISBN 13: 9780593544150
Verlag: Portfolio, 2024

Inhaltsangabe


“Darius has a unique ability to turn complex ideas into simple stories.” — Morgan Housel, #1 NYT bestselling author of The Psychology of Money

From investor and popular newsletter writer with 100k+ subscribers Darius Foroux comes an approach to building wealth that applies ancient wisdom to the chaos of modern-day markets

The Stoics understood that if you can control your reactions and manage your emotions, you can achieve success. The same principles apply to our financial lives today. The greatest investors approach the markets with discipline, emotional distance, and self-mastery—lessons that the Stoics have been teaching us for thousands of years.

Combining ancient wisdom with practical investment strategies drawn from analysis of the greatest investors of all time, The Stoic Path to Wealth will teach you how to: 

  • cultivate an investing edge by managing your emotions and developing your unique skills and talents
  • develop the discipline to ignore short-term market fluctuations and avoid living in the future
  • foster a mindset that allows you to enjoy what you have and avoid greed
  • create a sustainable approach to trading

As financial markets become increasingly unpredictable and chaotic, The Stoic Path to Wealth offers the key to weathering any economic storm while building wealth that will last a lifetime and beyond.

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Über die Autorin bzw. den Autor

Darius Foroux is an investor, entrepreneur, blogger, podcast host and writer in the personal development and personal finance space. He holds a master’s degree in Business Administration, with a specialization in finance, from the University of Groningen. He currently lives in the Netherlands.

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•  1  •

My Pursuit of
Enduring Prosperity

I was born in Tehran at the height of the war with Iraq, in 1987. One year later, my mother left the country for the Netherlands, where she already had family members who had made the same move several months earlier. My father wasn't allowed to leave the country during a war, so my mother had to make the trip alone. When she arrived at the Dutch immigration services, she had no money and just one suitcase; that was all. My father arrived in 1990 without any possessions. He had needed to travel by land, which took him nearly two months. It sounds dramatic, but it's the story of millions of people around the world. If you're living in the United States, the land of immigrants, your parents, grandparents, or great-grandparents probably came to the country under similar circumstances.

Everyone who leaves their birth country out of necessity needs to start from nothing. My parents had to get educated again, learn a new language, adapt to a different culture, build a social life, and build a better future for themselves, my brother, and me. For as long as I can remember, our family lived paycheck to paycheck; we were up to our necks in debt. In our house, everything revolved around money, or rather the lack of it.

My parents did their best to raise us comfortably, but they always argued about the price of everything, from groceries to clothes. Despite our limited means, my brother and I never went to bed hungry and even had a Nintendo gaming console. But somehow, I felt guilty. Like I was the cause of their financial problems. Even though I didn't know the exact details of the financial struggles of my parents, I could sense the constant tension in the house. I was afraid of losing everything we had. A recurring thought of mine was If they didn't have me, they wouldn't have to spend all this money and they would not argue. I realize now these were the thoughts of an overly responsible child. But my childhood did instill a sense of urgency in me. I was determined to become rich so we wouldn't have to live that way anymore.

That's what led me to pursue business and finance in college. I remember how my classmates struggled mightily choosing the right major. To me, it wasn't even a question. My only goal was to make a lot of money. And I believed that having a business degree was the highest-probability path to my goal.

In 2007, when I was still in college, I got a job at ING, a Dutch multinational bank. ING was on an international tear at the time, with offices across the globe. This was before the global financial crisis, and the industry was a lot less regulated than it is now. In the evenings I worked at ING, initially in the personal banking division, where I helped clients with mundane tasks like requesting credit cards or applying for personal loans. After three months of selling a lot of credit cards to clients, I was offered a position as mutual funds adviser in the investing division. It was a dream come true. In my teens, I had loved the world of finance that was glorified in movies like Wall Street and Boiler Room. When I received that opportunity, I imagined myself selling stocks on the phone just like Charlie Sheen's character, Bud Fox, in Wall Street. I didn't sell stocks of individual companies like Bud did, but I sold mutual funds, baskets of stocks, which was close enough for me. I felt like a stockbroker.

It was astonishingly easy to become an adviser in the Dutch financial services industry at the time. I participated in a three-week training program, and I was good to go. My assignment was simple: call existing clients who already invested in other financial products and persuade them to invest money in the latest mutual funds that the bank had introduced. The pitch was glorious, and calling clients was a great experience. This was a time when people actually loved talking to someone at their bank, when people still trusted bankers.

Looking back, however, I can't help but think, How on earth could a twenty-year-old kid with a three-week training program advise clients about what they should invest in? It was all about profit. The bank would consistently release new mutual funds with specific themes like sustainable energy, emerging markets, technology, you name it. A mutual fund is a basket of stocks that are picked by a fund manager. When you invest in these funds, you piggyback on the potential success of the fund manager. The goal was to sign up as many investors as we could, because the bank earned a fee on the money clients would invest. And signing up clients was easy, because who can resist the promise of earning money without working for it? Just invest money in a fund and wait till you get rich.

After my first few deals, I thought I was an investing genius. I talked about my work with everyone: my family, friends, fellow students, professors. I even bought shares of ING with the money I made at the bank. Immediately after I bought the stock, I was rubbing my hands together, waiting to get rich myself. I bought the stock for around $27. But one year later, ING Direct was trading around $3. I had started investing at the height of the housing market bubble that caused the financial crisis of 2008-9. I felt sick to my stomach when I lost that much money. It was a feeling that haunted me for years.

While I didn't sell at the bottom, I held on to the stock until 2011, when I finally couldn't take the emotional roller coaster anymore and sold it at around $11 a share. I had lost 60 percent of my money in four years. Meanwhile, the broader market had already recovered its losses and was even higher than before the financial crisis. While I invested only around $2,000, losing more than half of what you have hurts no matter what the dollar amount is. As if the pain of growing up with financial struggles weren't enough, I got burned in the stock market too. Investing was too hard. Like everyone who loses money in the stock market, I thought it was for rich people or Wall Street bankers with three-piece suits. Even though I had a master's degree in business administration and specialized in finance by that time, I had no confidence in building wealth through the stock market. I had given up the day I sold my stock.

The truth is we can't afford to not invest. Everyday life is getting more expensive. The prices of groceries, gas, insurance, energy, and almost everything else are going up. Many people can't afford to buy a house. What's worse, not all wages are keeping up with inflation. In reality, your wealth is either stagnating or decreasing every year . . . unless you own assets. The graph on the next page shows what inflation does to your cash over time. Between 1980 and 2022, inflation averaged 3.06 percent a year in the U.S. (that includes the high inflation of 2021 and 2022).

In comparison, the market (when I talk about "the market," I am always referring to the S&P 500 index, which contains the five hundred largest publicly traded U.S. companies) achieved an 11.44 percent average annual return since 1980. Returns since the 1928 inception of the S&P 500 have been roughly 10 percent per year. If we correct that for inflation, the market returned 8.38 percent a year. It doesn't sound like a lot. But look at the alternative, which is to stay in cash.

For cash holders, this is an ugly picture. Imagine you had put $1,000 under your mattress in 1980. Forty-two years later, in 2022, that money would have a real value of $240. But if you had invested that money into the S&P 500 index, you would have a real (inflation-adjusted) return of $29,632.50. In that time period, we've experienced wars, recessions, natural disasters, political tension, stock market bubbles, interest rate increases, and a severe financial crisis. We also went through a global pandemic, which caused nearly...

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Verlag
Portfolio
Erscheinungsdatum
2024
Sprache
Englisch
ISBN 10 
0593544153
ISBN 13 
9780593544150
Einband
Gebundene Ausgabe
Anzahl der Seiten
240
Kontakt zum Hersteller
Portfolio
https://www.wetones.co.uk/

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