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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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Hi Bill,

First of all I love your daily blogs.

You mentioned that a good rule is to try saving 10% or so of your money while working.  Well I also do that while retired.  First I use the 4% rule on my savings.  Then I add social security and pension to that.  Finally I take 10% of the grand total and save it.

So you see I follow your advice even AFTER retiring.



Thanks for your note, and a refreshing one at that, especially this week as we tune in to rhetoric regarding the debt ceiling debacle. 

Everyone seems to be thoroughly disgusted with our politicians, and I have my own take on what has brought us to this financial chaos, but we’ll save that for later.

As Americans, we should care deeply about what is unfolding inside the D.C. beltway in regards to our country’s financial future. 

As investors, we should largely ignore it and continue to focus instead, on things we can directly control, like our saving and our spending rate. 

Whether it is Marty or Me, the issues we can control will have a far FAR greater impact on our financial well-being over the next 2 decades, than what happens over the next 2 weeks on the political front.

Food for thought as we watch this debacle play itself out in the coming days.

Hello, Bill. Thanks so much for your work. Stumbled across passive investing about two years ago. Reading tons…still learning much.

My question: I hear Jack Bogle say that Social Security should be figured into the bond allocation mix. He doesn’t seem to advocate 100% of the equities even if SS is 50% of your income at retirement but weights heavily to equities. What is your take on using Social Security when determining one’s equities to bond mix for the soon to be retiree who will depend heavily on SS for income? Hope this is “general” enough (and clear enough) for this forum.

Regards, Jon

This is an important topic to address in making sure your financial resources sustain you throughout your retirement years. We will be covering this issue at length in our 3rd summer webinar series August 24th. Click here to register.

Your comments reflect the importance of creating a financial plan for yourself to determine how much risk you are able to take in the stock market in the short run.

How will the next bear market impact your financial well-being? How fast will you be drawing down your portfolio?

Pulling money out of the stock market for living expenses creates a “reverse-dollar-cost-averaging” phenomenon that wreaks havoc on portfolio returns. It is difficult, if not impossible, to answer your question without first creating financial plan to determine what that allocation is right for you, allowing you to answer some of the questions above.  Hope you can attend the webinar!

Bill, I greatly enjoyed tonight’s webinar.

I am thinking of switching my portfolio from active funds to broad-market, high daily volume ETFs for ease of asset allocation, low fees, commission-free buy/sell, etc… but NOT with the intent to actively “trade”.

I am concerned about the “Premium / Discount” to NAV, however.  This seems to add another layer of market risk (the price the market puts on the ETF) on top of the risks inherent in the underlying securities.

 Do you recommend ETFs, and is my concern valid?

Index funds can be purchased through investments in Exchange Traded Funds (ETFs), which are funds that trade like stocks on major stock exchanges.  For instance, iShares or Vanguard has a good lineup of exchange traded funds to choose from.

If you stick with broad market exchange traded funds, the issue of trading at a discount or premium to net asset value isn’t a problem.  For instance, yesterday  iShares Russell 2000 index (IWM) traded over 34 million shares!


Managing Risk – Your Portfolio, Your Life.   That was the title of last night’s Coffeehouse Investor webinar, the second in a three part summer series that covers the three Coffeehouse priniciples.

Thanks for the great turnout, and the many follow-up questions you sent my way. 

My next webinar, Living Your Financial Plan will be on August 24, at 9 p.m. Eastern Time, 6 p.m. Pacific.   Click here to register now, as this promises to be a full house with all the renewed interest on creating intelligent financial plans that are right for you. 

Last night we addressed three aspects of investment risk that are on everyone’s minds these days, stock market risk, inflation risk, and interest rate risk. 

With rates on fixed income (bond) investments so low, and the threat of inflation looming, your questions reveal a heightened concern about interest rate risk, and the impact a rising rate environment would have on your bond portfolio. 

During last night’s Webinar, I reviewed a table of data presented by Vanguard that shows the effect of sharply rising rates on a bond portfolio, specifically, Vanguard’s Total Bond Market Index Fund. 

Click here to access the report, with the table appearing on page 3 that shows the importance of sticking with a diversified bond portfolio to come out ahead over a 5-year period that includes a “bursting” of the bond bubble.

If you want to increase your success rate, double your failure rate.

That quote, attributed to Thomas Watson, founder of IBM, is one of my favorites.

If you don’t take risks, you will never be given an opportunity to fail, which means you are likely to have a low success rate in life.

Have you failed much at anything in the past couple of years? If not, you probably aren’t taking enough risks.

How do you embrace risk in your personal life?

In working with countless investors over the years, I have found that it is much easier for them to take risks in their personal lives if they possess a freedom from worry in their financial lives.

Let’s face it (and I’ve been there), when you are stressed about money, either how you are going to pay your bills next week, or whether you are going to run out of money 10 years after you retire, it can be a debilitating experience, one that emotionally freezes you from pursuing those things in your life that are rewarding and worth pursuing.

That is why it is so important to build a portfolio and embrace a financial plan that offers you confidence that you will reach your financial goals. Integral to this is the effective management of “risk” in your portfolio.

Tonight, I am going to present the 2ndin a 3 part summer webinar series titled “Managing Risk – Your Portfolio, Your Life.” I encourage you to attend (click here to register) as I share The Coffeehouse philosophy of risk management.

It will work for you, as it has worked for countless investors across the nation, including our clients at Soundmark Wealth Management.

Hope to see you there!