Pages From The Complete Chicken's Guide to Financial Security

8/2/2019 Pages From The Complete Chicken's Guide to Financial Security

1/17

THE ULTIMATE BOOK FOR

UNDERSTANDING AND CONTROLLING

THE MANY RISKS TO YOUR WEALTH

The

completechickens

guide tofnancialsecurity

HOW TO AVOID MAJOR MONEYLOSING RISKS THAT WILL

MAKE YOU POOR

John YamamotoB.Comm. MBA, CIM, FCSI, PFP


2/17

Copyright, 2005 John Saburo Yamamoto

All rights reserved. No part of this book may be reproducedin any form or by any electronic or mechanical means including

recording, photocopying, or any information storage and retrieval

system, without written permission from the publisher.

Although the author has exhaustively researched all sources

to ensure the accuracy and completeness of the information

contained in this book, we assume no responsibility for errors,inaccuracies, omissions, or any inconsistency herein. Any slights

of people or organizations are not intended. Readers must use

their own judgment and should consult a nancial expert for

specic applications to their individual situations.

All characters are ctitious. Any resemblance to actual

people, living or dead, is purely coincidental.

The views are of the author and do not reect the views of

any company associated with the author.

Although the Author strives to keep the information in

this book current and accurate, changes in the world economic

conditions can make even recent information outdated. Charts,

tables and examples are accurate only to the dates indicated. They

are given to illustrate general concepts and need not be completely

up-to- date for this purpose.

DESIGNED & DIGITALLY PRINTED BY ISBN 0-9687886-4-5

Printed in Canada


3/17

S p e c i a l

Thanks goesout to my wife

Yvonne Yamamoto and

my daughter Jillian for

patiently waiting for me to

write and research this book,

Adrienne Duffy, my Strategic

Coach, for giving me theinspiration to never quit my

dreams, and Gary Coskey

C.A., my friend.


4/17


5/17

Contents

Part I: Introduction to investment risksIntroduction: ................................................................................4

Why this book is unique?

Chapter 1 .....................................................................................9

Why should you care about managing investment risk?

Chapter 2 ...................................................................................11

What is investment risk?

Chapter 3 ...................................................................................15The rst method for managing risks to avoid severe

nancial losses to your wealth

Chapter 4 ...................................................................................18

The second method for managing risk to avoid severe


Chapter 5 ...................................................................................22

The third method for managing risk to avoid severe


Chapter 6 ...................................................................................25

The fourth method for managing risk to avoid severe


Chapter 7 ...................................................................................27

Where do the risks to my wealth come from?

Part II: Environmental or external risks

Chapter 8 ...................................................................................33External risks to your wealth 101

Part III: Emotional risksChapter 9 ...................................................................................61

Not being able to control our feelings of fear and

greed can cost us our wealth

Part IV: Financial planning risksChapter 10 .................................................................................89

Wealth building nancial planning tips

Tips .........................................................................................113

Appendix .................................................................................117


6/17


7/17

PART I:

INTRODUCTION TOINVESTMENT RISKS

How to Nurture and

Protect Your Golden

Goose


8/17

THE COMPLETE CHICKENS GUIDETO FINANCIAL SECURITY2

The Tale of the Financial

Golden Goose

One day a farmer noticed something glitteringunderneath his favorite goose. Upon lifting the goose

he noticed a small, pure gold egg. He took the egg to

his local bank and found that the egg was indeed pure

gold. He took the cash from the egg and paid off some

bills that were over due. Since he was a struggling

farmer the cash from the sale of the golden egg was

well appreciated.

The next day the farmer woke up early to check

on his golden goose. To his pleasure and surprise he

found another golden egg underneath his favorite

goose. He again took the egg to his local bank and took

the cash and paid off some more bills. Each day the

farmer would nd another golden egg. This continued

for months and soon the farmer found himself in a

solid nancial position. He had started to invest most

of the proceeds and had paid off many of his bills. He

also made some major improvements to his home.

Over time the farmer started to become

dissatised with his slow nancial progress. Although


9/17

PART I: INTRODUCTIONTO INVESTMENT RISKS 3

the egg-a-day nd was consistent, the farmer felt it

would take too long for one small golden egg to make

him rich. Rather than waiting for a single egg each

day he decided to kill the golden goose and get all the

eggs at once. Upon killing the golden goose the farmer

found no eggs were in the goose. Within a few years

the farmer was again on hard nancial times and had

to work just to survive for the rest of his life. He had

to live with the fact that his own greed and impatience

had led him to kill his golden goose. He gave up steady

nancial progress for a quick dollar and had in fact

destroyed his main asset (or principal).

MOTTO:

Protect your golden goose.

This book is designed to provide you with

concrete strategies for protecting your

golden goose or wealth from harm.


10/17

INTRODUCTION:

Why this book is unique?

There are three types of investors:

There are people that make things happen.

Then there are people that watch things happen.

And there are people who wondered what happened

Anonymous

Investment risks are anything that permanentlytake away your principal. People plan for themore obvious and imminent risks to their livesand, as a result, will fail to plug the holes wherewealth drains away. Most people fail to plan

financially and lack the financial knowledge toavoid financial risk resulting in a loss of theirmoney and a poor investment strategy. Thisbook is invaluable as it covers the largest numberof risks possible. By identifying and plugging

the holes where money drains away, this book isan invaluable guide to your lifetime investment

planning.


11/17


This will be a life-changing book for you. You are rst

provided with a clear summary of the entire universe of risks.

I have broken them into three clear categories: behavioral,

environmental, and planning risks. You also receive a scientic

model for building risk-efcient investment portfolios to reduce

risks while increasing returns. I am excited to provide you with

a comprehensive and scientic way to invest. I have replaced

the emotional-based, often gut-wrenching, trendy, or hot stock

investment strategy with a scientic and unemotional one.

I nd that most investment books are written on how to

become rich from the stock market, mutual fund market, bond

market, real estate with no money down, and the commodities

market. Few books had any focus on managing investment risks.

Other than the occasional University textbook with pages of math

proving the authors PH.D. thesis, few books covered the universe

of investment risks like this book does.

Gathering all the investment risks into a single book turn out

to be a painfully slow process, because I had to research so manybooks to put together a comprehensive risk management book.

I have been an investment advisor since 1988 and wrote this

book to help dispel many of the myths that people believe about

investment risk. Ever since Internet trading arrived, I have become

concerned with the recklessness of trading that is happening in the

stock markets. People have lost track of the reality of the dangers

of speculation. Short-term greed will lead people to long-termruin.

People often discuss their investment portfolio using

incorrect risk management theory. Many investment advisors

view risk from a one-dimensional perspective, and various books

that I have bought or read to research this book had very limited

views on investment risks. Some investment books did not even

have one page on risk management. Other risk management bookswere too academic and theoretical. These books were useful in the

classroom but were impractical for any benet in real life stock

and bond trading. Some risk books were written by a Ph.D. in

mathematics for otherPH.D.s in mathematics. These were of little

use as well.


12/17


Im a practical person, since I have to manage millions of

dollars of clients hard-earned cash on a daily basis. This book

was written to give you useful antidotes to the potential risks and

dangers to your hard-earned wealth. We need smart ways to dealwith the chaos of the microchip-based world. Only the investors

with the best knowledge of risk management will prosper and

survive in the future. Because an event in Asia, Europe, the Middle

East, or the U.S. can instantly send shock waves throughout

the stock markets of the world globalization risk management

solutions have to be included in our investment designs,.

Like a well-trained doctor or pilot, you need an investmentprofessional who can build a scientic risk strategy to deal with

uncertain times or emergency situations, such as 9/11 or the

1987 stock market crash. To rely solely on intuition, emotions or

outdated investment risk theory is dangerous to both advisors and

clients.

This book is different because it combines the investment

theories of many books. It is much more comprehensive as itcombines the risks from the economy, human psychology, and

nancial planning.

This book has integrated the best risk techniques of

the academic world with the practical needs of real money

management. To properly manage risk today, you need to be part

economist, part accountant, and part psychologist.

The chicken indicates an investmentsolution or tip.

The piggybank represents an investment

risk to be concerned about.


13/17


I have searched the entire world of investment risks to

compile this book as one of the most comprehensive and practical

guides to investment risk management in the 21st century. I wrotethis book in a simple readable format so that anyone can read and

benet from it. Everyone can benet from avoiding unnecessary

loss of his or her money.

The majority of this book will be devoted to providing you

with some key solutions to minimizing the impact of both internal

and external threats to your wealth. You can benet from the

systematic plan for dealing with risks provided in this book.I wish to start by identifying the risks to your wealth. Most

investors and even many investment advisors have not taken

the time to identify the major risks to their wealth. This list of

investment risks to your wealth is perhaps the most comprehensive

in any book I have read. The complete listing and identication

of the risks in this book is a combination of over $30,000 in

investment courses and books, and over 11 years of research.I wish the world of investing were simple. You cant have one

group of investments called risky and another group called risk-

free. This is the common mistake of untrained investors. Instead,

we need to re-label investments as those resistant to certain types

of risks while being vulnerable to other types of risks. Just as

Superman is vulnerable to Kryptonite, certain investments that

seem solid are vulnerable to certain types of risks.


14/17


CHAPTER SUMMARY:

I sincerely want to help you gain nancial success

and retire with security. I have witnessed so many

people lose or waste their money using poor risk

management., If this book can help one person realize

their mistakes and have a prosperous retirement, then

the efforts I took to write and publish this book have

been worth it. I also hope to permanently replace the

poor or incomplete books and theories on investment

risk with a more comprehensive and holistic risk

approach.

Good reading ahead.

John Yamamoto, MBA, CIM, FSCI, PFP


15/17

CHAPTER1

WHY SHOULD YOU CARE

ABOUT MANAGINGINVESTMENT RISK?

If you fail to manage the risks to your wealth, you will be

working much longer and much harder than is necessary. By

stopping the places where your wealth is leaking away, you can

achieve your wealth targets with less stress and worry. Also,the more money you have the more important risk management

becomes to maintaining your wealth.


16/17


Here is a list of some of the consequences you may

suffer by not managing the risks to your wealth:

The possibility of facing a bankruptcy. These areexploding in number and frequency. In 2003, people had a

greater chance of going bankrupt than having a divorce.

(Source: US data on bankruptcies in America,

Elizabeth Warren and Amelia Warren Tyagi, The

Two-Income Trap)

Losing your home

Divorce or marital problems due to arguments aboutmoney

Feeling like you will never be able to retire

Stress from job loss

Not being able to educate your children or grandchildren

Having to be dependent on your children

Having to worry constantly about money

Not being able to travel Not being able to pursue your hobbies

Having to work all of the time

Working at a job you no longer enjoy

Driving an old, dangerous or unreliable car

Not being able to help out your children

Not ever being able to consider retiring

Feeling that you always have to count your pennies

Worrying constantly about your future

Not being sure you are doing the right things

Feeling frustrated by your current portfolio

Feeling vulnerable to wars, recessions, terrorism etc.

Feeling like you are paying too much in taxes than are

necessary

And so on, and so on.

John Yamamoto

If you answered yes to at least one of the

statements above, this is the right book for you. For

nancial security, you need to learn and implement

the investment strategies outlined herein.


17/17

Purchase this book and others at http://ShopPagemaster.ca
http://shoppagemaster.ca/http://shoppagemaster.ca/

Documents

Pages From The Complete Chicken's Guide to Financial Security