What is included with this book?
A negotiation-based approach to investing and personal finance
Investing is best understood as a series of negotiations. The ability to conduct that bargaining with skill and confidence is worth a fortune. For example, if you overpay by two percent annually on an investment of one million dollars, assuming a return of seven percent per year, in thirty years it will have cost you more than four million dollars. With that much money at stake, you want to use tools that are recognized as world class. Negotiating Your Investments is about what you need to be smart and successful throughout the process. It is a guide to applying the science and principles of negotiation to your financial life. Most people don’t negotiate when investing, often thinking the process more like going to the doctor than working with a salesman. They fail to prepare, gather information, bargain, and gain commitment as they might in a recognized negotiation setting. Whether you are dealing with a true professional, a glorified salesman, or anything in between, this book will show you how to take charge of your most important financial deliberations. Author Steven G. Blum teaches readers the things they must understand going into such negotiations, methods for pursuing what they really need, ways to avoiding being taken advantage of, and techniques for getting others to fulfill their promises. He will guide you in recognizing and achieving best possible outcomes and putting dramatically more money into your pockets.
Part I: What the Best Negotiators Do – The Ivy League Method of Negotiating
Chapter 1: What Is a Good Outcome?
Identify Truly Good Outcomes and Don’t Get Distracted
What Makes for a Good Outcome?
Chapter 2: Interests, Options and Goals
What Do You Really, Really Want?
Dig Deep to Explore Underlying Interests
Don’t Settle for Win-Win
Structure the Deal to Meet Their Needs, Too
Work With Them to Create More Value
Chapter 3: Fairness
What is “Fair”?
Move Beyond “Market Value” to Measure Fairness
Chapter 4: Communication to Build the Kind of Relationship You Want
Set Relationship Goals
Choose Communication Tools Carefully
Work to Create the Atmosphere You Want
Focus on What You Want to Tell Them – And How
Use Active Listening Techniques
Be Aware of the Power Dynamics – And Consider Changing Them
Plan a Process That Will Lead to Good Outcomes
Chapter 5: Thinking about Commitments
How Tight Are The Bindings?
When Should We Be Bound?
Commitment is Not Just About the Ending – Consider It Throughout the Process
Many Little Agreement Steps
Chapter 6: Best Alternative: Where Your Power Comes From
Step 1 – An Inventory of Your Possible Alternatives
Step 2 – Identify Your BATNA
Step 3 – Strengthen Your BATNA
Step 4 – Estimate What the Other Side’s BATNA Might Be
Step 5 – Consider Whether You Can Weaken the Other Side’s BATNA
Work to Shape Their Perceptions
Be Careful Not To Rely Too Much on BATNA – Especially Where Relationships Are Important
Chapter 7: The Preparation Phase
Where Do We Hope to End Up?
Consider the Substantive Issues
Then Consider the Relationship Issues
You Want Good Substance and Good Relationships – But Don’t Trade One for the Other
Set High Achievable Goals
Who Are These People Who Will Soon Be Sitting Across from Us?
Chapter 8: Exchanging Information Phase
Ask Lots of Questions
Strengthen Your Bonds With the Other Parties
Gather Up All the Facts That They Are Comfortable Sharing
Managing the Danger That They May Lie to Us
Chapter 9: The Bargaining Phase
Work to Increase the Pie – And to Claim a Fair Slice
Use Conditional Language to Explore Trades That May Create Value
Propose Terms Favorable to You – But Defensible as Fair
Make Small Concessions Slowly and Deliberately – And Insist on Fairness
Be Resolute About Claiming Your Fair Share
Chapter 10: Closing and Commitment Phase
You Want Promises They are Sure to Keep
Create Scarcity to Enhance Their Enthusiasm for the Deal
Prepare to Be Patient
Chapter 11: The Problem with Agents
Sometimes Employing an Agent is Wise
Often Employing an Agent is Foolish
Are the Agent’s Interests the Same as Yours?
Part II: Applying Negotiating Skills to Investing
Chapter 12: Why Is Investing Really Just Another Type of Negotiation?
Investing is Similar to Other Big Ticket Negotiations
Do Not Be Fooled into Thinking It is Something Other Than a Negotiation
Chapter 13: What is a Good Outcome Regarding Your Investments?
Investment Goals are Narrower Than For Some Other Negotiations
Chapter 14: Applying the Negotiation Methods to Your Investing
Understanding Your Own Interests
Getting To Know Their Interests
Many Different Possible Options for How to Structure the Deal
Insist on Using Objective Standards of Fairness
Set Relationship Goals
Choose the Communication Tools That Are Best for You
Good Negotiating Process
Contributing to the Kind of Relationship We Want
When to Commit – And to What
Have a Strong Best Alternative
The Four Phases of the Investment Negotiation
Chapter 15: The Problem of Conflicts of Interest
Some Conflicts other than Money
Chapter 16: The Problem of Asymmetric Information
They Know Much More Than You Do About the Tricks of the Trade
Knowing More Creates Vast Opportunities to Take Advantage of Others
Chapter 17: Who Can You Trust? And Why?
Be Extremely Careful About Who You Trust – And How Much
You Can Work Well With People Without Trusting Them
You Can Trust Those Whose Best Interests Make Them Trustworthy
Chapter 18: Professionalism: Who is a True Professional and Why?
The Traditional Professions Struggle with Society’s Need for Trustworthy Help
The Traditional Professions Don’t Always Succeed – But They Must Always Try
Part III: The Economic Truths You Need to Know in Order to Be an Effective Investor-Negotiator
Chapter 19: Nobody Can Consistently Beat the Market
The Markets Are, For the Most Part, Rrational
Don’t Confuse Random Chance with Skill
Stock Research Offers Little Value
Chapter 20: Past Performance Does Not Guarantee Future Results
No One Can Predict the Future
Chapter 21: The Concept of Present Value
What is Tax Deferral Wworth?
Present Value and Life Insurance
Present Value and Money Back Guarantees
Present Value and Comparing Investments
Chapter 22: There is Really Only One Interest Rate
Higher Rates Reflect Higher Levels of Risk
Risky Investments Involve a Danger of Losing Much of Your Principal
Chapter 23: There Is No Such Thing as a “Free Lunch”… Except Diversification
Why You Want to Diversify
Chapter 24: Create a Highly Diversified Investment Portfolio
Be Honest With Yourself About Your Risk Tolerance
How to Achieve Diversification of an Investment Portfolio
Diversifying Asset Classes Beyond Stocks
The “Efficient Markets Theory”
Some Practical Aadvice on Choosing Specific Categories of Index Funds
Chapter 25: We Know What Has Happened in the Past
The Historical Average Return on Stock Investments is a Very Good Result
Seeking Higher Than Market Returns is Called Gambling
Chapter 26: Costs Are Important – They Reduce Your Returns
Higher Costs Result in Lower Returns
Many Investments Carry Expenses That Aare Just Too High to Be a Good Deal
Figure Out How Much You Are Paying to Those Who Lay Hands on Your Investments
How You Can Minimize Costs
Chapter 27: Investments to Avoid
Complex Partnership Deals
Chapter 28: How Much Is At Stake?
The Impact of the Fees You Pay for Advice
The Need for Action
Afterword: What is a Good Outcome in your Financial Life?
About the Author