pankaj pawar's Key Ideas from Just Keep Buying
by Nick Maggiulli

Lesson 3: The 4% Rule states that, we can retire when our annual spending is equal to 4% of our total savings. To retire, we should have at least 25 times of our annual spendings as our total saving….

Lesson 4: Crossover point- When our monthly investment income exceeds our monthly expenses we can retire.

Lesson 5: formula to calculate Monthly “ROI” = (1+annual return)^(1/12) - 1

Lesson 6: Inflation: it is a silent killer, inflation rate of 5% annually, cuts purchasing power in half in 14 years.

Lesson 7: Convert your human capital into financial capital, Work physically to earn and save earned money to invest & convert into assets.

Lesson 8: Bonds and other assets should make upto 20% of your portfolio. they will help with portfolio rebalancing. Investment property such as plot, house and apartment should be bought on debt.

Lesson 9: REIT’s is also a good option to own real estate without having to manage the property personally., it gives average compounded annual return of (10%-12%)

Lesson 10: Small business- expected returns on small business is 20% to 25% highest compared to all other assets class.

Lesson 12: average in strategy always underperform the buy now strategy.

Lesson 13: Just keep buying instead of averaging and waiting for dips.

Lesson 14: Mitigate Bad luck as investor: Diversify with enough low-risk assets(e.g. bonds), Withdraw less during bear markets. Increase your income sources.

Lesson 16: Use “Buy & hold” strategy, Never try to avoid “drawdowns”.

Lesson 17: a 33% drawdown in market takes 50% gain to get back to even, Formula: Expected annual return= (1+% Gain needed to Recover)^(1/Number of years to recover)-1 , by using this formula if the market recovers in 1 year we can gain 50% rise on portfolio, in 2 years 22% gain, in 3 years-14%, in 4 years- 11%, In 5 years- 8%.