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The Coffeehouse Investor newsletter provides you with brief bursts of inspiration in your journey toward simplifying your investment decisions and increasing your investment returns!


The Coffeehouse Book

The New Coffeehouse Investor Book

The Coffeehouse Investor

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

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Dear Coffeehouse Investor

How did you react a few years ago as the market tanked?  I’d love to hear how you controlled your emotions during such turmoil.

 On a personal level, it has never been much of a problem to control my emotions when it comes to investing.  First, I am 51 years old, love my work, and don’t intend to retire anytime soon – certainly not before age 65. 

Because I have at least another 15 years of saving and investing before I start drawing on my portfolio, what the stock market does over the next couple of years is largely irrelevant to reaching my financial goals (in fact a bear market might benefit me).  How much I save over the next 15 years, when I retire, and my stock/bond allocation at age 65 is relevant. 

Another reason I didn’t get emotional when the market tanked is because I don’t watch my account balance on a daily, weekly, or even monthly basis. 

What good does it do to monitor your account each day?  Nothing.

Studies have shown that when an investor monitors his or her account on a regular basis, the pain of losing money on down days exceeds the joy of making money on up days, causing investors to make unwise decisions at untimely moments to alleviate the pain. 

Working as an advisor at Soundmark Wealth Management and helping clients to control their emotions is a far greater challenge, and a gratifying one at that. 

Tomorrow I will share a few ideas on how you can control your emotions that will greatly benefit your experience (and returns!) over your lifetime of investing.

In addressing the question posed Friday by a 24 year-old Coffeehouse Investor, the following is a recent column I presented to a local newspaper . . .

Start saving now, and try to save at least 5-10% of your paycheck in a tax-deferred retirement account such as an Individual Retirement Account (IRA) or workplace sponsored 401k plan.  If you are like me, saving can be a battle, both emotionally and financially, but I have found that the best kept secret to saving is to do it automatically with a monthly or bi-weekly deduction directly from your paycheck.  With bills to pay, cars to purchase, and homes to own, there will always be countless other interests competing for your paycheck, but if your savings dollars are already spoken for when you get that paycheck, your savings battle is already won! 

What happens if school loans need to be paid off, or other accumulated debt needs to be reduced?  Start saving anyway in your retirement account.  Get that account established with regular contributions.  The tax-deferred compounding over time will prove to be invaluable as you approach your retirement years.  After that, start working at paying down your debt. 

Now that you have established your retirement account, you will be faced with a myriad of investment choices from which to select.  Feeling overwhelmed already? You needn’t be.  Your selection process should be quite simple, and here are a few suggestions to keep you on track.

The most efficient way to build wealth with your investments over time is to invest in low-cost index funds – mutual funds that match the returns of broad market indices over time.  Keep it simple, sticking with stock and bond index funds, and ignore all the esoteric funds like gold, commodity and energy funds for someone else. 

When dividing your retirement dollars between stock and bond index funds, a good “rule of thumb” is to allocate your age into bonds.  This means that a 25 year old would have 25% of their portfolio in bonds, and 75% in stock index funds.

Why index funds?  These investments allow you to maximize your return potential in your portfolio.   This is because most professional stockpickers underperform the stock market averages over time, due to the efficiency of the marketplace. 

An equal, if not greater benefit of owning index funds is that you don’t have to monitor the performance of your investments each week compared to a benchmark, because you “own” the benchmark! 

This allows you to attend to the most important wealth-building tool of all; how much you save.  More importantly, instead of following the stock market, you can use your creative energy to get on with your life, immersed in your new job, pursuing your dreams and making a difference in this world! 

The Vanguard Group, located in Philadelphia, PA, is a leading provider of index funds (  This company offers an abundance of information for investors who want to learn more about the basics of investing, including many of the principles discussed in this column.  In addition to providing retirement account options, its online calculators are useful tools to see if you are saving enough to reach your financial goals.


Dear Coffeehouse Investor

What would be your advice for a 24yr old?  Thanks!  (I love The CHI)

 One of the most gratifying (and interesting) aspects of presenting The Coffeehouse message to investors across the nation and around the world is the wide range of investors who tune in to the philosophy. 

I guess that shouldn’t come as a surprise, because the three principles, upon which our philosophy is build, are timeless.

  1. Save for a rainy day.
  2. There is no such thing as a free lunch.
  3. Don’t put all your eggs in one basket. 

When I held my first Coffeehouse seminar, back in March, 2000 at the regional King County Library in Bellevue, it was packed – with almost everyone in attendance over 60-years old.

Over the past decade, it seems like that age group has been the one that is really keen on making sure they do the right thing with their portfolios as they enter into retirement years. 

In conducting the polls throughout my Coffeehouse webinars, this statistic holds true, with the vast majority of participants in the “over 50” crowd. 

But every once in a while I connect with someone who is just starting out, like the person who posed question above. 

I admire these young investors who possess the wisdom and maturity to recognize that by taking charge of their financial future from the get-go, it means they will have a lot less to worry about (and likely a lot larger portfolio), down the road.

Tomorrow I will address the question.

Today I want to invite you, especially if you are a parent or grandparent, to take the time and introduce The Coffeehouse Investor to a youngster in your life, maybe a child, maybe a grandchild or friend, and get them started in the right direction. 

This simple gesture could change a life.

I wanted to send a big “thank you” to everyone who participated in last night’s webinar, “Index Funds and Beyond”.  We had over 400 Coffeehouse Investors from across the nation (and 4 countries) participate in this educational webinar. 

Don’t miss part 2 of our summer school series, “Managing Risk – Your Portfolio, Your Life” on July 20th at 6pm (PDT).  We will take an in-depth look at building an intelligent portfolio that matches your goals and financial future.  To register click here.

Also, mark your calendar for our last summer webinar, “Living Your “Financial” Plan” on August 24th.

We would love to hear your feedback and comments about our webinar series, let us know what you think!

"The Safe"


Dear Coffeehouse Investor,  

Can you substitute ETF’s for traditional Vanguard funds in a Coffeehouse Investor portfolio?  


Last week I read that there are now more than 1000 Exchange Traded Funds from which to choose.  Even though actively managed funds are muscling their way into the ETF universe, most of those 1000 funds are still promoted as “index funds.” Add to that the plethora of traditional “index” mutual funds, and the total lineup of “index” funds available for building a Coffeehouse Investor portfolio can seem overwhelming.   

It doesn’t have to be.   

You can easily substitute ETFs for traditional Vanguard mutual funds when building a Coffeehouse Investor portfolio, but should you?   

Tonight, we will discuss this question and more during my first in a 3-part summer Webinar series titled “Index Funds and Beyond.”  Click here to register, and hope to see you there.  

Start time is 6:00 p.m. Pacific Time.