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A Q&A With Bill Schultheis, Author of The Coffeehouse Investor Print E-mail
Written by Bill Schultheis   
Monday, 09 May 2011 00:00
Page 1 of 3
Overview: Bill Schultheis wrote the first edition of The Coffeehouse Investor in 1998, and ever since he has been educating investors about the importance of following his book’s edict — how to build wealth, ignore Wall Street and get on with your life. The third edition of his book, The New Coffeehouse Investor, was published in 2009. In this Q&A, Bill shares his Coffeehouse principles as well his thoughts on the current climate for investors, the importance of being disciplined and where he likes to go for his perfect cup of java.
If someone read The Coffeehouse Investor when it was originally published, what new messages and stories would they get from The New Coffeehouse Investor?
In many ways, they get the same successful, straightforward message that was originally introduced to readers in 1998. The three investment principles highlighted in the book are timeless: 1) Save for a rainy day (develop a long-term financial plan); 2) Don’t put all your eggs in one basket (diversify among asset classes); and 3) There is no such thing as a free lunch (capture the entire return of each asset class through low-cost index funds).

The third edition includes four new chapters that cover:
  • The challenges and complexities of drawing down one’s portfolio throughout retirement. I emphasize the importance of creating a financial plan, implementing the plan and then revisiting the plan on a consistent basis to make sure you are on track to reach your financial goals. 
  • The wisdom of sticking with the three Coffeehouse principles in all types of markets and not succumbing to the empty promises of Wall Street, especially in bear markets. 
  • The phenomenal growth of index funds, especially the construction of so-called fundamental index funds, and the explosion of exchange traded funds. I point out how one can trade these newfangled products in the same manner as stocks, ending up with the same disastrous results.
  • The challenges placed before us in building wealth, ignoring Wall Street and getting on with our lives. I discuss the role the Coffeehouse philosophy plays in allowing people to focus on their essential creativity, which the world needs now more than ever before. 
The past few years have been rough on a lot of people. Has your message changed during this time, and have you noticed a change in the way people view investing in general?
If anything, the past three years, and the past decade, have steeled our resolve to embrace the timeless Coffeehouse principles. Because of the massive amounts of fraud generated by the Wall Street crowd over the past five years, there seems to be a general mistrust of the financial industry. The Coffeehouse philosophy allows investors to place their trust not in Wall Street but in themselves and the collective creativity of human beings around the world. A large percentage of investors want to take control of their financial well-being. The three Coffeehouse principles allow them to do just that.

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Last Updated on Monday, 09 May 2011 13:20