Motivated Money by Peter Thornhill
I read Motivated Money by Peter Thornhill and found it extremely interesting – I was recommend the book by a channel that I am following on YouTube called Sugar Mamma which is run by a financial planner
I will be teaching the following main topics to my kids
- That most of returns from investments come from dividends- so returns are 2 dimensional – 1 is from capital growth and 2 from dividends
- Asset is defined as something that pays you and a liability is something you pay for – so the question to ask is – does the object you own generate income or does it cost you money
- Need to develop a clear long-term strategy to build your investments e.g. buy a cheap car, pay off mortgage as quickly as possible and invest in shares
- Look at the amount of return/cash you need to generate from your assets to live off – so if you want $100k per year and you are using a 5% return – you will require an asset base of $2 million($100k/.05)
- 2 GOLDEN RULES – SPEND LESS THAN YOU EARN AND BORROW LESS THAN YOU CAN AFFORD
- Start young as time is your most important asset – grow your portfolio slowly with regular savings and recycled dividends
- The value of a share is different to the share price – if a big bank shares reduce by 50% – this does not necessarily mean that their business has halved
What a great book – I read it twice