The Billionaire Money Rules

What our research shows about how the self-made Super Rich build their wealth

If you are like nearly every other successful person, you’re not ready to rest on your accomplishments. You want to build on your success so far to create even more wealth and more value. In fact, according to our research, 94 percent of successful business owners want to be wealthier. (And even if you don’t own a business, you are effectively the CEO of your family, so this all applies to you, too.)

Why you need serious wealth
You’re not driven by greed or after wealth simply for wealth’s sake. Instead, you probably want to grow your wealth substantially to achieve goals that are deeply meaningful to you.

As the chart below shows, these goals likely include taking care of your family and other loved ones, supporting the causes you care deeply about and perhaps even changing the world for the better.

To make those goals real, you’ll need to determine the amount of wealth you’ll need to reach them. Whatever your amount is, if it enables you to achieve all that is most important to you and your family, we call it serious wealth.

The Billionaire Money Rules

It takes discipline and focus to become seriously wealthy. We have evaluated the attitudes, behaviors and actions of self-made billionaires and have identified some of their most pronounced, dominant and persistent patterns—the Billionaire Money Rules. These seven rules encapsulate the key mindsets and strategies that you may want to consider adopting yourself.

#1. Commit to extreme wealth. Truth be told, many people would like to be rich but have not committed the time or effort to get there. Following this rule means having a clear sense that money is a critical—if not the critical—objective.

#2. Engage in enlightened self-interest. Enlightened self-interest takes many forms. One example is making well-reasoned decisions based on solid financial projections. Another example can be seen during negotiations. Skilled negotiation is at the heart of successful economic endeavors. As Bill Gates said, “In business, you don’t get what you deserve. You get what you negotiate.”

#3. Get in the line of money. Some endeavors make more money than others. Where the self-made Super Rich choose to apply their skills counts. For instance, they know they’ll have a greater chance of attaining wealth by being their own bosses than by working for somebody else. Following this rule means pursuing fields and initiatives that offer the highest paybacks, now and in the future.

#4. Pay everyone involved. When building teams, the very wealthy assume everyone has a degree of self-interest that can be used. They never assume people are willing to work solely for satisfaction or fulfillment, and therefore they reward handsomely—with cash, equity or some other form of currency—to cultivate the loyalty and specific behaviors that can help them reach their long-term goals.

#5. Connect for profit and results. Highly successful people think about networking as a means to an end: finding the person, information or tools that get them one step closer to their goals. Following this rule means maintaining a small but deep network of relationships that may lead to friendship, but that certainly will lead to power and influence.

#6. Use failure to improve and refocus. Failure is inevitable, so most of the very wealthy don’t worry about avoiding it. Instead, they focus on learning from each experience and using the lessons to get an advantage the next time around. Rather than obsessing about lost opportunities and getting discouraged, they study their failures and do all they can to prevent repeating missteps.

#7. Stay focused. The wealthiest among us know there are very few things they do exceptionally well. They also know the role these skills and expertise play in generating wealth. Being focused means sticking to their plans and not getting distracted by other opportunities or events that call for new and different skill sets.

Where to start? Determine the amount of wealth you need to live a life of financial freedom and meaning. Armed with that number, you can start to incorporate the Billionaire Money Rules yourself.

ACKNOWLEDGEMENT: This article was published by the BSW Inner Circle, a global financial concierge group working with affluent individuals and families and is distributed with its permission. Copyright 2017 by AES Nation, LLC.
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Fundamental of the Week: #2 – MAKE QUALITY PERSONAL. Take pride in the quality of everything you touch and everything you do. From the way you create a proposal to the way you answer the phone, from the way you research a solution to the way you fill out paperwork, always ask yourself, “Is this my best work?” Remember that everything you touch has your signature. Sign in bold ink.

A common saying on the farm while I was growing up was “measure twice, cut once.” It turns out this expression is from an English proverb, but a Russian proverb says to “measure seven times, cut once.”

This proverb is a great rule for a carpenter because if he cuts a piece of wood improperly, the piece of wood may no longer be usable. But whether it’s a mistake cutting a piece of wood or making a different type of mistake, the important thing to note is that not taking the time to make sure one’s work is done correctly could cost time, money, and/or reputation.

I saw this idiom in action while I was employed at PriceWaterhouseCoopers. There were strict procedures in place to ensure that every letter and every report was formatted to the Firm’s specifications. It was important to the Firm that everything that was prepared was done in a professional manner that reflected the quality of the Firm.

At Bernhardt Wealth Management, it means making sure every application, every IPS, every letter, and every report is completed accurately. It means documents scanned for the client or our files are not scanned at an angle. It means the advice we give is the best we can offer. It means we respond in a timely manner to our clients. It means adhering to our internal processes and procedures as documented in BOMS. It means taking personal pride in the quality of our work.

Will we miss something periodically? Probably. But we will resolve to learn from it. And each day thereafter, we will take great pride in knowing we’ve done our best. We want our work to demonstrate the best we have to offer the world. As the Russian proverb says, “Measure seven times, cut once.”

Make it a great day!

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How Fed Actions Affect the Value of Your Money

Anyone who follows financial news at all is likely to hear references to actions taken by the Federal Reserve Board (usually shortened to “the Fed”). Most often, we hear that the Fed has acted to raise or lower interest rates, but many may not be entirely clear how this actually applies to them. Especially if you are nearing retirement and are not in the phase of life where you are particularly worried about rising interest rates making your loans more expensive, you may sometimes think that all the “Fed chatter” you hear about doesn’t really have much direct effect on you or your lifestyle.

In a very general sense, you are correct. But it is worth keeping in mind that Fed actions–and, sometimes, inactions–do have a measurable effect on a topic that all of us are concerned about at one time or another: the value of the U.S. Dollar. As the Fed seeks to keep the U.S. economy along the smoothest possible path, their decisions are primarily geared to maintain the stability of the U.S. Dollar.

For a while now, the Fed has indicated that it intends to allow short-term interest rates–you may hear this referred to as the “Fed funds rate”–to rise a bit. The main reason for this is that the Fed kept the Fed funds rate at or near zero percent for several years, in the wake of the 2008 financial crisis. They took this action in order to maintain liquidity in the face of a drastic situation. This liquidity allowed the economy to continue to operate in a more or less orderly manner. To everyone’s relief, the Great Recession finally eased, and the U.S. economy eventually resumed a steady, though slow, rate of growth that has remained in effect until the present.

Now, as the U.S. economy expands, the Fed is monitoring the rate of inflation. When an economy is growing, it is susceptible to inflation, mainly because of increasing wages and, if inflation gets out of control, it can derail the economy. The Fed presently has a target range for inflation of around 2 percent (the current rate, as announced last month by the Department of Labor, is 2.1 percent).

As long as inflation stays in its desired target range, the Fed will probably permit short-term rates to increase, likely to as much as 1.5 percent. This gradual increase in the Fed funds rate is intended to help stabilize the value of the dollar. After all, the price of anything–including a nation’s currency–is theoretically a function of supply and demand. Interest rates reflect the price of the U.S. Dollar, and the Fed seeks to maintain it in parity with supply and demand, keeping the value stable. After all, a stable dollar is good for everyone, from retirees to recent college graduates entering the job market for the first time.

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Fundamental of the Week: #1 – PUT CLIENTS FIRST, ALWAYS. We exist to serve our clients’ best interests. Period. We have a fiduciary responsibility to make sure that our advice is free of any biases, and that we avoid any conflict of interest. When people give us their money, we enter into a sacred trust with them. Honor that trust ALWAYS.

Fundamental #1 is why Bernhardt Wealth Management exists. In my previous employment, I disliked commissions and the conversations registered representatives were having with their managers about the compensation they would receive under different solutions they could recommend. More often than not, the solution recommended was the solution that yielded the greatest commission. Ultimately, each solution was suitable for the client, but my objection was that the conversation was never about what was the best solution for the client. I couldn’t look in a mirror and feel good about my recommendations when I knew there were solutions that were better than what I was allowed to recommend. This was primarily due to the example set by my parents.

I remembered the time my father borrowed a shovel from a neighbor when we were building an addition to the house. After Dad was done with the shovel he washed it thoroughly to remove any dirt, he used a steel brush to remove as much rust as he could, and he sharpened the shovel. Dad returned the shovel in better condition than when he first borrowed it.

That was the example my parents set for me. Dad’s obligation was to return the shovel. If it had been returned caked with mud, he would have met his obligation. To me, the dirty shovel is representative of the suitability standard. But Dad’s example was a clean, sharp shovel which is the fiduciary standard by which Bernhardt Wealth Management must operate.

Of course, establishing a firm which cannot receive commissions makes it impossible to benefit from one solution over another because our fee is our fee. But avoiding conflicts of interest may also mean reducing assets under management if the client sleeps better having lower debt and it is in their best interest. The bottom line is our clients trust us to give advice in their best interest. ALWAYS honor that trust.

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The Bernhardt Way – Our Fundamentals

Bernhardt Wealth Management (BWM) was created in July 1994. Since that time different people have joined the ranks of BWM. Fortunately, the people who have sought employment opportunities to serve our clients had the same values as mine and the leadership of team. But culture does not happen accidentally so we engaged David Friedman, the CEO and Founder of High Performing Culture, to help us craft our “Fundamentals” so that we would be more purposeful in maintaining our culture.

On January 29, 2018, we had a formal rollout of our Fundamentals by sharing the document you see in this image. While this document itself may be new, the 26 Fundamentals are not. They have been the founding principles of BWM since our inception. Each week for the next 26 weeks (and for as long as BWM exists), we will share a Fundamental of the Week every week. It will be discussed in our weekly team meeting, will be included in my e-mail signature and Weekly Commentary, will be shared on social media, and will be shared during client review meetings. Stay tuned.

In the meantime, if you would like to have a copy of The Bernhardt Way, contact me and we will send you a copy.

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Is the Long-Predicted Stock Market Correction Finally Here?

For several years, many stock market prognosticators have been predicting some sort of decrease in stock prices. They have called this downward move by various names: pullback, correction, price dip, or even more drastic terms like plunge or bear market. And yet, for years, the major market indexes seemed oblivious to all the warnings, continuing to push through record high after record high.

Well, here we are in early February 2018, and the market may finally be delivering what so many of the pundits have been looking for. In the last two trading sessions (as this is written), the Dow has fallen by just over 1,800 points (around 7 percent of its value at its high point) and the S&P 500 has shed about 173 points (about 6 percent of its value).

What has caused these sudden downdrafts in the market? Analysts suggest a couple of principal factors. First, many have been saying for quite some time that the market is “overvalued,” meaning that the prices of many of the stocks that make up the averages have been pushed higher than the underlying value of the issuing companies can justify. When this happens, the markets tend to become very susceptible to any bad news that can give investors a reason to sell their holdings. And that brings us to the second factor: worries about inflation that were set off by the rather positive employment and wage figures reported by the US Labor Department at the first of February. The report stated that the US economy added about 200,000 jobs in January (more than many analysts expected) and that wages grew by almost 3 percent—the strongest rise since the onset of the Great Recession. Further, unemployment was reported at just over 4 percent. Taken all together, many analysts believe the stage may be set for companies to be forced to pay higher and higher wages. This can lead to higher inflation, which is typically bad for the economy. This belief, combined with the “overvalued” state of the markets was enough to trigger a selloff.

It’s important to remember that the markets always go down at some point. Periodic corrections (or pullbacks, or plunges, or whatever one might call them) are actually a necessary part of the business cycle. This became harder to remember during the bull market, when it seemed that the only way prices could go was higher. But it couldn’t last forever, and everyone, whether they wanted to admit it or not, knew this.

What remains unknown is the depth and duration of the downturn that may have started or how quickly the market will recover. Will we see a 10 percent correction? Twenty percent? We just don’t know. As we have stated many times in this blog, efforts to predict the precise size and timing of market moves–up or down–are unsuccessful in the overwhelming majority of cases.

In uncertain times–and all times are uncertain, for one reason or another–we might do well to remember the advice Warren Buffett offered in a recent annual report to the shareholders of Berkshire Hathaway: “During such scary periods, you should never forget two things: First, widespread fear is your friend as an investor, because it serves up bargain purchases. Second, personal fear is your enemy. It will also be unwarranted.”

During all times, investors should maintain focus on long-term goals and stick with a carefully conceived strategy. Over time, in good markets and bad, these traits will prove far more important than short-term price movements.

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The Real Value of a Financial Advisor

As many are aware by now, one of the central features of the tax law that went into effect on January 1, 2018, is the repeal or limitation of a number of deductions that many taxpayers were accustomed to listing on their Schedule A forms. Among these were state and local taxes, mortgage loan interest, homeowner association fees, tax preparation fees, safe deposit box rental fees, and investment expenses, including fees paid to financial advisors. In exchange for the elimination or reduction of these itemized deductions, the law features a much higher standard deduction for filers–almost double the previous amounts.

Because many financial advisors–and all fiduciaries–are compensated on a fee-only basis, some taxpayers may be re-thinking the benefit they get for the costs associated with their investments. You may be wondering, “If I can’t deduct the fees and other expenses associated with my investments, is the relationship still worthwhile?” The answer to this question depends heavily on how you perceive the value delivered by your financial advisor.

In a March 2016 guest column for financial writer and blogger Michael Kitces, Bob Seawright, a New York investment officer and blogger presented a thoughtful review of the principal benefits of working with a professional financial advisor. Referencing studies by the investment rating firm Morningstar and the Vanguard mutual fund group, Seawright points out in his article “A Hierarchy of Advisor Value” that helping clients select, buy, and sell investment vehicles is only a small part–perhaps the smallest part–of the value they offer their clients. Instead, he suggests, the most important things that advisors do for clients have more to do with “coaching” and overall strategies related to investing, spending, and planning behaviors. Here is Seawright’s list of the sources of advisor value, in descending order of importance:

• Encouraging Consistent and Increased Savings.
• Encouraging Consistent Investment.
• Financial Planning.
• Managing Expectations and Behavior.
• Asset Allocation.
• Managing Costs and Fees.
• Portfolio Rebalancing.
• Security Selection.

If you’ll think about it, the order of importance is almost exactly the reverse of what many investors consider when they think about their financial advisors. This is understandable; for decades, the popular image of “stockbrokers” is of persons who have “hot tips” and get their customers into investments that are ready to explode on the upside. For many years, the financial industry has been transaction-driven, dependent on somebody selling something to someone. New financial consultants were expected to go out and convince everyone they could of the superior returns the consultant would generate for the client. And, as Seawright correctly notes in his article, relationships built on such unrealistic expectations will almost always prove disappointing, especially for the client.

But this business model is fading away–and justifiably so. More and more, clients are turning to advisors who, rather than trying to sell the client the latest hot stock, are seeking to build long-term relationships founded upon always seeking the client’s best interests above all. To do that, professional advisors must prioritize exactly as Seawright’s list suggests. Our most important job, as trusted advisors, is to help our clients take actions that will lead to long-term success and achievement of their most important goals, whether those include financing a child’s education, funding a secure retirement, preserving an estate for future generations, starting a business, or assuring the availability of necessary health care in later years. To do this, we must be much more than “stock pickers.” We must coach, teach, advise, reassure, and explain. We must help clients overcome their own tendencies to act out of emotion–either fear or greed–and instead lead them to stick to a strategy that we have helped them design, taking into consideration their long-term goals, risk tolerance, resources, and dreams.

Interestingly, the Morningstar study that Seawright cites suggests that “better financial decision-making” such as that outlined above can add as much as 1.82 percent annually to portfolio value. Over time, such “best practices” can be expected to add as much as 29 percent to retirement income. Such hard-dollar benefits are certainly significant. But beyond the mathematical value, the benefit of professional, evidence-based financial advice, delivered and implemented in the client’s best interest, goes far beyond anything that can be entered in a spreadsheet or listed on a tax return.

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The Final Scorecard of Warren Buffett’s “Long Bet”

On July 5, 2017, we reported on the ten-year “long bet” between Warren Buffett, CEO of Berkshire Hathaway, and Ted Seides, a hedge fund manager who was formerly president of Protégé Partners LLC and now managing partner at Hidden Brook LLC. The bet’s premise, as registered on, website of the Long Now Foundation, the wager’s “trustee,” reads, “Over a ten-year period commencing on January 1, 2008, and ending on December 31, 2017, the S&P 500 will outperform a portfolio of funds of hedge funds, when performance is measured on a basis net of fees, costs, and expenses.”

On the last day of 2017, Buffett was so far ahead that only a market meltdown could have caused him to lose the bet on December 31st. But no such meltdown occurred and Buffett won the bet. In fact, Seides conceded the bet back in the spring of 2017. He even wrote an opinion piece on, “Why I Lost My Bet with Warren Buffett,” both explaining why he lost the bet and offering some lessons for investors.

What should investors make of all this? Actually, Seides’s own article offers some good points to consider. First, he correctly points out that the equity markets have had an extraordinary run, starting with the disastrous drop that helped initiate the recent Great Recession. In fact, for a time, Buffett’s position lagged Seides’s, since the active trading of hedge funds is designed, among other things, to mitigate downside risk, which can be an effective tactic in a bear market. Related to this, however, Seides also points out the impact of the long-term view, coupled with the inability of most investors to stay the course when the waters are especially choppy. He wrote:

“Studies of human behavior repeatedly point to the inability of investors to stay the course through tough times. The S&P 500 had a harrowing start to the bet in 2008. In October of that year, Warren publicly made a prescient market call, reminding us to be greedy when others were fearful.”

“The S&P 500 index fund fell 50 percent in the first 14 months of the bet. Many investors lacked Warren’s unparalleled fortitude, and bailed out of the markets when the pain became too severe. An investor who panicked and only later re-entered the market would have found that his bank account at the end of the bet was a lot smaller than a hypothetical account in which he earned the index-fund returns for the whole period.”

Though he lost the bet, Seides’s analysis is spot-on. Indeed, Buffett makes the same point in his 2017 letter to Berkshire Hathaway shareholders, when he wrote:

“During such scary periods, you should never forget two things: First, widespread fear is your friend as an investor, because it serves up bargain purchases. Second, personal fear is your enemy. It will also be unwarranted. Investors who avoid high and unnecessary costs and simply sit for an extended period with a collection of large, conservatively financed American businesses will almost certainly do well.”

As Buffett mentions, the other important point to consider, in addition to the importance of holding firmly to the long-term view, is that managing fees, transaction costs, and other investment expenses is essential for investors who want to maximize the value of their portfolios over the long haul. It’s important to remember that Seides’s portfolio for the bet generated positive returns, albeit less than Buffett’s. But once all fees and transaction costs were subtracted, the gap between first and second place only widened.

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What Should Investors Make of Bitcoin Mania?

Bitcoin and other cryptocurrencies are receiving intense media coverage, prompting many investors to wonder whether these new types of electronic money deserve a place in their portfolios.

Cryptocurrencies such as bitcoin emerged only in the past decade. Unlike traditional money, no paper notes or metal coins are involved. No central bank issues the currency, and no regulator or nation state stands behind it.

Instead, cryptocurrencies are a form of code made by computers and stored in a digital wallet. In the case of bitcoin, there is a finite supply of 21 million,(1) of which more than 16 million are in circulation.(2) Transactions are recorded on a public ledger called blockchain.

People can earn bitcoins in several ways, including buying them using traditional fiat currencies (3) or by “mining” them—receiving newly created bitcoins for the service of using powerful computers to compile recent transactions into new blocks of the transaction chain through solving a highly complex mathematical puzzle.

For much of the past decade, cryptocurrencies were the preserve of digital enthusiasts and people who believe the age of fiat currencies is coming to an end. This niche appeal is reflected in their market value. For example, at a market value of $16,000 per bitcoin,(4) the total value of bitcoin in circulation is less than one tenth of 1% of the aggregate value of global stocks and bonds. Despite this, the sharp rise in the market value of bitcoins over the past weeks and months have contributed to intense media attention.

What are investors to make of all this media attention? What place, if any, should bitcoin play in a diversified portfolio? Recently, the value of bitcoin has risen sharply, but that is the past. What about its future value?

You can approach these questions in several ways. A good place to begin is by examining the roles that stocks, bonds, and cash play in your portfolio.

Companies often seek external sources of capital to finance projects they believe will generate profits in the future. When a company issues stock, it offers investors a residual claim on its future profits. When a company issues a bond, it offers investors a promised stream of future cash flows, including the repayment of principal when the bond matures. The price of a stock or bond reflects the return investors demand to exchange their cash today for an uncertain but greater amount of expected cash in the future. One important role these securities play in a portfolio is to provide positive expected returns by allowing investors to share in the future profits earned by corporations globally. By investing in stocks and bonds today, you expect to grow your wealth and enable greater consumption tomorrow.

Government bonds often provide a more certain repayment of promised cash flows than corporate bonds. Thus, besides the potential for providing positive expected returns, another reason to hold government bonds is to reduce the uncertainty of future wealth. And inflation-linked government bonds reduce the uncertainty of future inflation-adjusted wealth.

Holding cash does not provide an expected stream of future cash flow. One US dollar in your wallet today does not entitle you to more dollars in the future. The same logic applies to holding other fiat currencies — and holding bitcoins in a digital wallet. So we should not expect a positive return from holding cash in one or more currencies unless we can predict when one currency will appreciate or depreciate relative to others.

The academic literature overwhelmingly suggests that short-term currency movements are unpredictable, implying there is no reliable and systematic way to earn a positive return just by holding cash, regardless of its currency. So why should investors hold cash in one or more currencies? One reason is because it provides a store of value that can be used to manage near-term known expenditures in those currencies.

With this framework in mind, it might be argued that holding bitcoins is like holding cash; it can be used to pay for some goods and services. However, most goods and services are not priced in bitcoins.

A lot of volatility has occurred in the exchange rates between bitcoins and traditional currencies. That volatility implies uncertainty, even in the near term, in the amount of future goods and services your bitcoins can purchase. This uncertainty, combined with possibly high transaction costs to convert bitcoins into usable currency, suggests that the cryptocurrency currently falls short as a store of value to manage near-term known expenses. Of course, that may change in the future if it becomes common practice to pay for all goods and services using bitcoins.

If bitcoin is not currently practical as a substitute for cash, should we expect its value to appreciate?

The price of a bitcoin is tied to supply and demand. Although the supply of bitcoins is slowly rising, it may reach an upper limit, which might imply limited future supply. The future supply of cryptocurrencies, however, may be very flexible as new types are developed and innovation in technology makes many cryptocurrencies close substitutes for one another, implying the quantity of future supply might be unlimited.

Regarding future demand for bitcoins, there is a non‑zero probability (5) that nothing will come of it (no future demand) and a non-zero probability that it will be widely adopted (high future demand).

Future regulation adds to this uncertainty. While recent media attention has ensured bitcoin is more widely discussed today than in years past, it is still largely unused by most financial institutions. It has also been the subject of scrutiny by regulators. For example, in a note to investors in 2014, the US Securities and Exchange Commission warned that any new investment appearing to be exciting and cutting-edge has the potential to give rise to fraud and false “guarantees” of high investment returns.(6) Other entities around the world have issued similar warnings. It is unclear what impact future laws and regulations may have on bitcoin’s future supply and demand (or even its existence). This uncertainty is common with young investments.

All of these factors suggest that future supply and demand are highly uncertain. But the probabilities of high or low future supply or demand are an input in the price of bitcoins today. That price is fair, in that investors willingly transact at that price. One investor does not have an unfair advantage over another in determining if the true probability of future demand will be different from what is reflected in bitcoin’s price today.

So, should we expect the value of bitcoins to appreciate? Maybe. But just as with traditional currencies, there is no reliable way to predict by how much and when that appreciation will occur. We know, however, that we should not expect to receive more bitcoins in the future just by holding one bitcoin today. They don’t entitle holders to an expected stream of future bitcoins, and they don’t entitle the holder to a residual claim on the future profits of global corporations.

None of this is to deny the exciting potential of the underlying blockchain technology that enables the trading of bitcoins. It is an open, distributed ledger that can record transactions efficiently and in a verifiable and permanent way, which has significant implications for banking and other industries, although these effects may take some years to emerge.

When it comes to designing a portfolio, a good place to begin is with one’s goals. This approach, combined with an understanding of the characteristics of each eligible security type, provides a good framework to decide which securities deserve a place in a portfolio. For the securities that make the cut, their weight in the total market of all investable securities provides a baseline for deciding how much of a portfolio should be allocated to that security.

Unlike stocks or corporate bonds, it is not clear that bitcoins offer investors positive expected returns. Unlike government bonds, they don’t provide clarity about future wealth. And, unlike holding cash in fiat currencies, they don’t provide the means to plan for a wide range of near-term known expenditures. Because bitcoin does not help achieve these investment goals, we believe that it does not warrant a place in a portfolio designed to meet one or more of such goals.

If, however, one has a goal not contemplated herein, and you believe bitcoin is well suited to meet that goal, keep in mind the final piece of our asset allocation framework: What percentage of all eligible investments do the value of all bitcoins represent? When compared to global stocks, bonds, and traditional currency, their market value is tiny. So, if for some reason an investor decides bitcoins are a good investment, we believe their weight in a well-diversified portfolio should generally be tiny.(7)

Because bitcoin is being sold in some quarters as a paradigm shift in financial markets, this does not mean investors should rush to include it in their portfolios. When digesting the latest article on bitcoin, keep in mind that a goals-based approach based on stocks, bonds, and traditional currencies, as well as sensible and robust dimensions of expected returns, has been helping investors effectively pursue their goals for decades.

(1) Source:
(2) As of December 14, 2017. Source:
(3) A currency declared by a government to be legal tender.
(4) Per Bloomberg, the end-of-day market value of a bitcoin exceeded $16,000 USD for the first time on December 7, 2017.
(5) Describes an outcome that is possible (or not impossible) to occur.
(6) “Investor Alert: Bitcoin and Other Virtual Currency-Related Investments,” SEC, 7 May 2014.
(7) Investors should discuss the risks and other attributes of any security or currency with their advisor prior to making any investment.

Source: Dimensional Fund Advisors LP, December 2017. The opinions expressed are those of Dimensional and are subject to change. The commentary above pertains to bitcoin cryptocurrency. Certain bitcoin offerings may be considered a security and may have different attributes than those described in this paper. Dimensional does not offer bitcoin. This material is not to be construed as investment advice or a recommendation to buy or sell any security or currency.
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The Road to Longevity: Living to 120—and Beyond?

Medical technology can now identify risk factors in the human body long before they impact your health

A medical revolution is underway—one that’s making it possible for us to extend our lives for decades by stopping now-fatal diseases before they can take hold of our bodies. In the coming years, we’ll not only be able to live longer, but also have fuller lives characterized by enduring physical mobility and mental sharpness.

Here’s a closer look at the personal longevity revolution—and what it could mean to you and your family as you seek to live your best life.

Stop disease before it starts: the power of biomarkers and genomes

Perhaps the most interesting component of longevity care is the role of biomarkers in understanding genomic risk and promoting long-term health.

Biomarkers are biological data points that reveal the current physical state of affairs of a particular condition. Most biomarkers are blood tests for future risk, but they also might include other health data points like a calcium score or even simpler values like heart rhythm and blood pressure.

Biomarkers are nothing new, but they can now be used in advanced ways thanks to personal genome sequencing—a process that can reveal a specific future health risk you face so you can stop it in its tracks. What’s more, new health biomarkers are being identified regularly—giving doctors more data points to examine and track in the pursuit of longevity. (Bonus: The costs of gene sequencing and biomarker analysis are also coming down.)

A person’s unique genome is just that—unique. Genomic mapping and analysis enables doctors to identify the specific processes that lead to the creation of a future disease state. Once a biomarker corresponding to that future disease is identified, a detailed protocol can be developed to track and manage it.

Bottom line: You can know if you have specific risk factors in your body that could lead to major health problems, long before those health problems ever rear their ugly heads. Armed with that almost predictive insight, you can take steps to stop those problems before they have a chance to do damage.

Your Options For Longevity

The choice is yours

It’s a given that you want to live a long, healthy and active life—and that you want the same for your loved ones.

The question therefore is “What are you doing about it?”

Basically, you have two options:

  1. Manage the process yourself using available medical resources. For example, you can have your genome mapped by any number of health service providers. The question, however, is how to use the genomic information effectively once you have it. You can adjust your diet and exercise more—but that’s not really comprehensive longevity care.
  2. Work with longevity care experts. You can work with physician and care teams who have a deep understanding of longevity care and are actively staying abreast of the latest developments in the field. These experts will regularly monitor developments with your particular biomarkers, with the goal of staying out in front of any illnesses, diseases or other negative health outcomes. They will also provide you with a range of options to address any issues that do crop up, often using more advanced and less invasive health care methods.

Longevity care like this is often available through high-quality concierge medical practices. There are a number of different types of concierge medical practices, but two major types typically provide longevity planning:

  • Physician concierge practices, which a provide a high-level patient experience by ensuring greater access through rapid callbacks, extended office hours and shorter wait times
  • Continuous connected care practices, which use the connectivity provided by technology to deliver care and ensure continuity in the patient experience, regardless of their location or time of day
ACKNOWLEDGEMENT: This article was published by the BSW Inner Circle, a global financial concierge group working with affluent individuals and families and is distributed with its permission. Copyright 2017 by AES Nation, LLC.
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