Rip van Winkle

I want you to be rich and wealthy when you are my age which is 69.

I don’t want you to be struggling.

I’m not struggling, but I could’ve been doing a lot better than I am.

I didn’t know any better when I was young.

I didn’t have anybody to teach me anything about finance.

My parents knew virtually nothing. I never had one conversation with them about money when I was growing up.

After I started making a little money, I found this investment company which was located next door to a dentist that I had been visiting.

So I went inside their office one day, and I asked if I could talk to an investment advisor for an hour or two. A guy came out to help me.

I told him I would like to pay him for his time for a couple of hours to ask him questions about the world of finance.

He said OK, and I sat down with him for two hours, and asked him questions.

I paid him a few hundred dollars for his time.

I state this to show you how little I knew about stocks and bonds and how money worked.

That begin, my lifelong education in the world of finance.

I’m still not where I want to be. I still don’t understand the eco-babble that is spoken on CNBC, and maybe it is a good thing that I don’t.

Nevertheless, I have acquired a better understanding of the world of finance and stocks and bonds, enough to develop my own opinions about investing.

Here’s what I want you to do.

I want you to dissociate yourself somewhat from the culture that is presented on CNBC and FOXBusiness news.

Those programs tend to cater to professional investors, especially CNBC.

I’m not saying that you should totally ignore what they say; I just want you to take a different approach.

Those programs tend to inculcate you into the culture of daytrading or monthly trading.

They want you to take the short term approach to investing.

Buy low, sell high, but above all – trade.

As Jim Cramer often states: Pigs, get fat, hogs get slaughtered. Take a little off the top. And so on.

These network gurus promote an endless cycle of buying and selling.

I don’t think you can get wealthy that way.

I don’t think you can time the markets in the way that they make you think you can.

I think it’s okay to watch these shows to get an idea of the economy and where things are going.

It’s always helpful to try to learn some of the terms that you are not familiar with.

But I think a better approach to investing is to go the way of Rip van Winkle,

I want you to invest in stocks that you use, that you are familiar with, that you believe in.

You should think about these stocks. You should do the research on these stocks.

You should look at the profit and loss statements. You should look at the balance sheets. You should listen to a few conference calls if you have the inclination.

You should ask yourself whether you think they will be around for your lifetime.

If you think they have potential, I want you to invest a reasonable amount of money in these stocks

Then I want you to go to sleep for 40 years, twice what Rip recommends.

I don’t care what news you hear.

I don’t care if a dinosaur-destroying asteroid hits central Mexico.

I don’t care if the Yellowstone caldera blows up.

Go to sleep for 40 years.

Wake up in 40 years and see where your stock is.

I think you’ll be pleasantly surprised.

That stated, you shouldn’t bet, the whole ranch on one stock.

But, you shouldn’t be in 1,000,001 stocks either.

And you should never invest in a stock in which you have no knowledge.

Nor should you invest in a stock in which you don’t use.

It is your knowledge and use of a stock which will give you poise and confidence in times of turmoil.

With that stated, you should also invest your money in other asset classes.

You should put some of your wealth in real estate, in Bitcoin, and gold.

I don’t know anything about bonds, and I don’t don’t trust governments to be responsible with my money; so I don’t invest in bonds.

But if you feel comfortable in bonds, you should put some of your money in there.

The point is to take the long term approach.

Take the Rip van Winkle approach.

Taking this approach has other benefits.

It automatically immunizes you from the world of options and futures, which is nothing short of gambling.

Don’t gamble with your future in that way.

Stick with a slower, sounder approach to building wealth.

That’s it.

Sincerely,

Archer Crosley

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