Invest Your Way to Financial Freedom: A Step-By-Step Guide to Investing and Building Wealth in the Stock Market by Bradford Woods

PART l
GETTING STARTED 

Before we get started, it is important to understand what to expect from this
book and also what this book is not. Invest Your Way to Financial Freedom
is not a get rich quick scheme. There are many ways to make money, but if
you are looking to make (or lose) a quick buck, then this book is not for
you!
To this end, I have a confession. The step-by-step process outlined in this
book is based on the knowledge I have acquired and successfully
implemented through the extensive teachings of stock market investment
gurus including but not limited to Benjamin Graham, Warren Buffett,
Charlie Monger, Peter Lynch, Bill Ackman, Mohnish Pabrai, Joel
Greenblatt, Seth Klarman, Aswath Damodaran, and Phil Town.
Invest Your Way to Financial Freedom will provide you a comprehensive,
yet succinct, easy-to-apply step-by-step process to researching, analysing,
categorising, shortlisting and investing in quality companies at discount
prices. Your objective is to achieve exceptional returns that in the medium
to long term will outstrip the performance of the major indices and
potentially many of the large managed funds.
In the introduction I referred to the phrase ‘trading and investing.’ Whilst
the terms are often interchanged and sometimes used synonymously, for the
purposes of this book, each term has a very different and distinct meaning. I
define trading as a process of buying and selling shares, options, futures,
crypto or Forex often within very short timeframes (minutes, hours, days,
weeks, or months). Traders often use technical analysis to make buying and
selling decisions.
With a focus on the long term, Invest Your Way to Financial Freedom is
focused on teaching and guiding you how to research, select and invest in
quality listed companies at/or below fair market value. Whilst I have
included a chapter describing how and when I supercharge my share
portfolio using call options, which I deem as a trading strategy, this book is
not about trading. The alternate approach ‘investing’, is a long-term
strategy based on analysis of the business fundamentals. The key
differentiator is that you are investing for the long term in businesses in
which you become a part owner.
If you are determined to build wealth in the stock market, have a long-term
perspective, are prepared to invest time and effort into understanding and
adopting the step-by-step process outlined in this book, then read on, strap
in, get involved, and enjoy the journey.
To provide you some vision of what is ahead, Chapter One explains why we
choose to invest in the stock market and the advantages and disadvantages
of doing so. Chapter Two provides an overview of the Ten Pillars of
successful investing which represent the critical themes and ethos I deem
required to be a successful and profitable investor.

Chapter One
Why Invest in the Stock Market?

There are many forums and financial instruments within which you can
invest your money. The more common include investing in your own
business (start-up or otherwise), investing in someone else’s business, real
estate and property, commercial and government bonds, interest bearing
deposits, commodities (directly or indirectly), options, futures, crypto
currency, equities/stocks, and many more.
Each forum and financial instrument have a unique personality with a
distinct set of behaviours. Whilst each is geared with the common objective
of generating profits and/or cash flow, each has a unique mechanism of
doing so. Each comes with its respective pros and cons including varying
capital requirements, profit and return expectations, investment timeframes,
levels of risk, and varying levels of liquidity to get in and get out of the
market in a timely manner and at a reasonable price. Each has its own
distinctive risk profile and barriers to entry, the major barrier being that of
access to investment capital. For example, property investment requires a
significant level of capital and/or a healthy salary combined with existing
equity to borrow the necessary funds, usually hundreds of thousands of
dollars or more.
There are many reasons why I choose to invest the significant majority of
my resources in the share market, listed below:
Low barrier to entry. One of the fabulous attributes of the stock market is
that anyone can invest. It has a low financial barrier to entry. That is, you
can start with a small amount, for example a few hundred dollars.

Invest Your Way to Financial Freedom: A Step-By-Step Guide to Investing and Building Wealth in the Stock Market by Bradford Woods