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Adopt the Seven Practices of the Rich

help. Call your broker and request an AIP (direct debit/payroll deduc-
tion) form; if you don’t already have a broker, you can start with the
online brokerages listed in the next item.
4. You are a very experienced investor who can pick your own stocks and
manage your monthly investment decisions without the help of a full-
service broker. Use a fully automated online or discount broker to
trade shares, access market information, and manage your portfolio.
Watch for conditions and any hidden charges that may apply to trans-
actions (i.e., some online brokers advertise low rates, but they are for
market orders only, not the limit or stop orders that the most sophisti-
cated investors use). E*Trade ( etrade.com ), Scottrade ( scottrade.com ),
and TD Waterhouse ( tdameritade.com ) are a few of the discount bro-
kers you can try online and by phone, and for frequent trades online.
Keep abreast of new entrants in this market; larger banks now offer
competitive rates and services. As rates, terms, and conditions change,
you should continually research available brokers. Some also offer
other services for a fee, such as news, research, charting, and analysis.
Premium services are also usually available. Discount brokers are
convenient, flexible, and, most importantly, charge low commissions.

By the way, I receive no compensation, commission, or inducement of

any description from any of the financial companies I reference in this
chapter. My recommendations are based on my independent research
of investment products and performances.
5. You already make a significant portion of your income from trading

stocks or other investments. When trading for a living, avoid the two
major pitfalls many business owners fall into: not paying themselves

first and overpaying their taxes.

By separating a portion (10 percent) of your business income from
your trading and diverting it into an AIP, you are consciously achieving the sep-
aration of business and personal investing that is vital to a sophisticated investor.
This is a paramount form of protection. Things don’t always work out as
planned. And without the separation (psychologically, physically, and legally),
you remain open to the risks of consumption and litigation with what is supposed
to be your retirement money. I know a number of people who lost millions of
dollars and had never separated their monies in this matter. The result: They
were flat broke because, incredibly, they never set up an AIP, one of the simplest

financial ideas. Even for the advanced investor, I cannot emphasize how impor-
tant it is to separate your AIP money from your other money via an entity. If
you are a successful investor, continue to do what you are doing—just put

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