Live It Up Without Outliving Your Money!

About the Author

Paul Merriman, the author of "Live It Up Without Outliving Your Money!", is a seasoned financial expert with over four decades of experience in the field of investment management. As the President of Merriman Capital Management, Merriman has dedicated his career to helping individuals manage their finances and plan for retirement. He is also a well-known host of the weekly radio show Sound Investing and a regular columnist at Marketwatch.com. Through his extensive practical experience and his role as a hands-on money manager, Merriman has gained profound insights into the financial challenges faced by people both before and during retirement.

Main Idea

The central theme of "Live It Up Without Outliving Your Money!" is to guide individuals in creating and maintaining a robust retirement portfolio. Merriman emphasizes the importance of having a well-thought-out investment strategy that balances risk and return while addressing common pitfalls that investors face. The book provides practical steps to ensure financial security during retirement, covering aspects such as asset allocation, risk management, and the psychology of investing. Merriman's goal is to help readers regain confidence in their retirement planning by offering straightforward, actionable advice.

Table of Contents

1. Why Some Succeed and Many Fail
2. Common Traps Investors Fall Into
3. Lessons from Smart People
4. The Psychology of Successful Investing
5. You Can Win the Retirement Game
6. Your Perfect Portfolio
7. Why Size Really Does Matter
8. Controlling Risks
9. Meet Your Enemies: Expenses and Taxes
10. How Reliable Are Stocks?
11. Putting Your Perfect Portfolio to Work
12. Withdrawals: When Your Portfolio Starts Paying You
13. Hiring an Investment Advisor
14. Your Action Plan
15. My 500-Year Plan

Why Some Succeed and Many Fail

Investing is often perceived as a daunting task, primarily because it requires specialized knowledge and disciplined execution. Paul Merriman points out that many investors fail due to common mistakes such as taking too much or too little risk, paying excessive fees, and lacking a clear investment plan. He likens investing to a journey, where the best route is efficient but often unexciting. Merriman emphasizes that success in investing comes from understanding and managing risks while avoiding distractions that can derail your financial goals.

“Investing isn't terribly difficult, but it's a specialized area that requires careful navigation.” - Paul Merriman

Common Traps Investors Fall Into

Merriman identifies sixteen common mistakes that investors make, which can significantly impact their financial well-being. These mistakes range from procrastination and taking excessive risks to trusting the wrong institutions and letting emotions drive investment decisions. Each mistake is dissected to provide readers with a clear understanding of how to avoid these pitfalls.

Mistake No. 1: No Written Plan

Having a written investment plan is crucial. Merriman stresses that people with written plans for their investments tend to accumulate more wealth during retirement compared to those without a plan. This document should outline key assumptions about inflation, investment returns, savings, and retirement goals.

“People with written plans for their investments wind up with much more money during retirement than those who don't have written plans.” - Paul Merriman

• Specify main assumptions about inflation and future investment returns.
• Detail the amount to save before retirement and expected withdrawal amounts during retirement.
• Include sources of fixed income like pensions and Social Security.

Mistake No. 2: Procrastination

Delaying investment decisions can be detrimental. Merriman argues that waiting for the "right time" to organize investments can significantly reduce the potential returns over a lifetime. The longer you wait, the less time you have to benefit from compounding returns.

Mistake No. 3: Taking Too Much Risk

While taking risks is inherent to investing, taking excessive risks can turn investors into speculators. Merriman advises paying close attention to risk management and maintaining a balanced approach to investments.