If you have spent any time on our website, you may have played the game “Outfox the Box.” We thought it was time we reviewed the concept again in case you were thinking about derailing your investment plans.

Are you interested in the entertainment value of the stock market, or is your primary goal to maximize returns and minimize your risk in an effort to reach your long term financial goals?

It is as simple as that.

The Coffeehouse philosophy of investing can be summed up in a quick game called “Outfox the Box.”

Are you ready? You are the contestant in this game. There are ten boxes, and you know how much is in each box. These are your choices, it looks something like this….

$1000 $2000 $3000 $4000 $5000
$6000 $7000 $8000 $9000 $10,000

Which box will you choose? (Remember, you know how much is in each box)

This is not a trick question. Anyone would choose the $10,000 box. The choices you make when building a diversified portfolio are just as easy.

This time let’s change the rules a little. This time only the $8000 box is shown. It looks something like this….

$8000 ?? ?? ?? ??
?? ?? ?? ?? ??

Now which box will you choose?

The answer is also obvious – you would choose the $8000 box.

Why?

Because the chance of increasing your winnings is not worth the risk of choosing an amount substantially less, unless of course you are a gambler, in which case, you are probably at the wrong website, and should be here instead.

With the stock market average consistently beating 75% to 85% of all mutual funds, it is a testimony to the gargantuan advertising budget of the financial industry that so many investors forego a sure thing of the $8000 box in search of something better.

While you’re at it, do you feel lucky? Scroll down to the bottom of this page and try your luck at Outfox the Box.

Wall Street spends $20 billion dollars a year in advertising dollars trying to convince you to forego the $8000 box in search of something better.

Sometimes we need to step back from the clutter and fray and ask ourselves…

Is it worth the risk?

Is it worth my time?

Is it worth my money?

Wall Street says it is. (What else are they going to say?)

The next time you ponder these questions, remember how quickly you chose the $8000 box.

Bill Schultheis
As the author of The Coffeehouse Investor, Bill Schultheis is also a Financial Advisor and Co-founder of Soundmark Wealth Management.

The Three Principles

1. Save for a rainy day.

Develop a long term financial plan.

2. Don’t put all your eggs in one basket.

Diversify in different asset classes.

3. There is no such thing as a free lunch.

Capture the entire return of each basket, or asset class, through low cost index funds.

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THE COFFEEHOUSE INVESTOR BOOK

How to Build Wealth, Ignore Wall Street & Get On With Your Life
by Bill Schultheis

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Who is The Coffeehouse Investor?

This non-commercial web site is for investors across the nation and around the world who recognize and embrace the sophistication of simplicity in their investment portfolios as well as their personal lives.

The Coffeehouse Investor does not provide financial advice - our purpose is to provide creative education for investors who want to build wealth, ignore Wall Street and get on with their lives by making informed, intelligent investment decisions.