James d. Gwartney

Business Review (
hbr.org
), February 2, 2018. 
https://hbr.org/2018/02/ikeas-success-cant-be-attributed-to-one-charismatic-
leader
. 
↩ 

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98. The World Bank, “Self-employed, total (% of total employment) (modeled ILO estimate),” International Labour
Organization, ILOSTAT database data retrieved in April 2019. 
https://data.worldbank.org/indicator/SL.EMP.SELF.ZS
. 
↩ 
99. Janene Pieters, “A Fifth Of Dutch Millionaires Are Farmers,” NLTimes.NL, September 12, 2017.
https://nltimes.nl/2017/09/12/fifth-dutch-millionaires-farmers
. 
↩ 
100. Bruno Dallago, Kier Discussion Paper No. 968, “Diverging Paths of Entrepreneurship in Post-Transformation Countries,
a Comparative View”; Kyoto Institute of Economic Research, March 2017. 
http://www.kier.kyoto-u.ac.jp/DP/DP968.pdf
. 
↩ 
101. Thomas Stanley and William D. Danko point out in their bestseller The Millionaire Next Door (Atlanta: Longstreet Press,
1996) that the most common characteristic of millionaires is that they have lived beneath their means for a long time. Over
half of them never received any inheritance and fewer than 20 percent received 10 percent or more of their wealth from
inheritance. 
↩ 
102. See “Your Top Debt Management Questions Answered.” Dave Ramsey. N.p., October 25, 2014.
https://www.daveramsey.com/blog/the-truth-about-debt-management
. 
↩ 
103. Some may need creative methods of controlling impulse purchases with a credit card. If this is the case, economist and
financial adviser William C. Wood suggests that you freeze your credit card inside a block of ice in your refrigerator. By the
time the ice thaws, your impulse to buy may have cooled. 
↩ 
104. Justin Higginbottom, “Governments Finally Embrace The Sharing Economy,” 
Ozy.com
, September 30, 2018.
https://www.ozy.com/fast-forward/governments-finally-embrace-the-sharing-economy/89688
. 
↩ 
105. Professor William C. Wood calls such items “SIT expenditures.” Wood indicates that “SIT stands for two things: (1) sit
down when you get an unexpected bill; and (2) surprises, insurance, and taxes.” 
↩ 
106. In addition, for some Muslims, the payment of interest is not allowed under Sharia law, and the return will reflect some
type of profit sharing that achieves a similar goal, as will be described at the end of this element. 
↩ 
107. Nils-Gerrit Wunsch, “Retail price of a premium pack of 20 cigarettes in selected European countries in 2017 (in GBP),”
April 3, 2019. 
https://www.statista.com/statistics/415034/cigarette-prices-across-europe.
 
↩ 
108. Our calculations assume that your investments yield a return of 7 percent every year. Obviously this is unlikely to happen.
Even though you can expect an average annual return of approximately 7 percent, this return will vary from year to year. This
can make a difference in how much you accumulate at retirement, but the difference is likely to be small. 
↩ 
109. These average returns are for the United States market, but those in other advanced economies will be pretty much the
same. If they were better in the United Kingdom than the United States, for example, global investors would move funds into
the United Kingdom until this were no longer true. When a country has continually high returns on bonds, it suggests that
investors feel that there is also greater risk associated with that country, especially if either default (failure to pay) or devalue
(due to currency depreciation). In other words, high apparent rates of return on government bonds is usually a strong signal of
bad government. A 7 percent real (after inflation) rate of return may not sound like much compared to what some stocks, such
as Dell and Microsoft, have yielded. But a 7 percent compounded annual rate of return
(?)
means that the value of your

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savings will double every ten years. In contrast, it will take thirty-five years to double your money at a 2 percent interest rate,
the approximate after-tax return earned historically by savings accounts and money market mutual funds. Note: You can
approximate the number of years it will take to double your funds at alternative interest rates by simply dividing the yield (the
average annual return on your money) into seventy. This is sometimes referred to as the Rule of 70 or, for those who like a
little more precision, the Rule of 72. 
↩ 
110. Krystyna Krzyzak, “CEE: A System In Flux,” Investment & Pensions Europe, January 2018 (Magazine).
https://www.ipe.com/pensions/country-reports/cee/cee-a-system-in-flux/10022463.article
. 
↩ 
111. Christopher Jarvis, “The Rise and Fall of Albania’s Pyramid Schemes,” Finance & Development, a quarterly magazine of
the IMF, March 2000, Volume 37, Number 1. 
https://www.imf.org/external/pubs/ft/fandd/2000/03/jarvis.htm
. 
↩ 
112. Any mention of specific funds does not mean that we think that they are preferable to any alternative. You should engage
in careful research yourself before you buy an investment. Remember, the future you are investing in is yours. 
↩ 
113. Dimitar Boyadzhiev et al., Morningstar Manager Research EMEA, “Morningstar’s European Active/Passive Barometer,”
February 2019. 
https://www.morningstar.com/en-uk/lp/european-active-passive-barometer
. 
↩ 
114. See Jeremy J. Siegal, Stocks for the Long Run, 3rd edition (New York: McGraw Hill, 2002): 342–43. 
↩ 
115. See Burton G. Malkiel, A Random Walk Down Wall Street: The Time Tested Strategy for Successful Investing (New York:
W. W. Norton & Company, 2015): 177–78. 
↩ 
116. See Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing (New York:
W. W. Norton & Company, 2003): 189–190. For additional evidence that a mutual fund yielding a high rate of return during
one period cannot be counted on to continue to do so in the future, see Mark M. Carhart, “On Persistence in Mutual Fund
Performance,” The Journal of Finance 52, No. 1 (March 1997): 57–82. 
↩ 
117. See Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing (New York:
W. W. Norton & Company, 2003): 180–181. 
↩ 
118. Abraham Okusanya, “Lessons from 118 years of asset class returns data,” FinalytiQ, March 28, 2018.
https://finalytiq.co.uk/lessons-118-years-capital-market-return-data/
. 
↩ 
119. Even those investing in index funds should obtain some advice from experts. There are tax and legal considerations such
as taking advantage of tax-deferred possibilities, establishing wills and trusts, making wise insurance choices, etc., which do
require input from specialists. 
↩ 
120. See Liqun Liu, Andrew J. Rettenmaier, and Zijun Wang, “Social Security and Market Risk,” National Center for Policy
Analysis Working Paper, No. 244, July 2001. 
↩ 
121. Inflation-indexed bonds are also issued by the United Kingdom, Germany, the Russian Federation, and Sweden, among
other countries. 
↩ 

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122. OECD, Directorate for Employment, Labour and Social Affairs: Pension systems: “Ukraine: Pension system profile.”
https://www.oecd.org/countries/ukraine/45336467.pdf
. 
↩ 
123. OECD Project on Financial Incentives and Retirement Savings, Policy Brief N°1, “The tax treatment of retirement
savings in private pension plans,” December 2018. 
https://www.oecd.org/daf/fin/private-pensions/Tax-treatment-of-retirement-
savings-Policy-Brief-1.pdf
. 
↩ 
124. Tranio, “Real estate agency commission rates in different countries,” September 18, 2017.
https://tranio.com/articles/real_estate_agents_commissions_in_various_countries
. 
↩ 
125. Bank for International Settlements, Joint Forum, “Mortgage insurance: market structure, underwriting cycle and policy
implications,” August 2013. 
https://www.bis.org/publ/joint33.pdf
. 
↩ 
126. Eurostat, “Mean and median income by educational attainment level–EU-SILC survey.” Last update: 27 August 2019.
https://ec.europa.eu/eurostat/en/web/products-datasets/-/ILC_DI08
. 
↩ 
127. Pay Scale, Inc. College Salary Report Updated for 2019. Retrieved from 
www.payscale.com/college-salary-
report/majors-that-pay-you-back/bachelors
. 
↩ 
128. Bitcoin.org, “Avoid Scams: Familiarize yourself with some of the most commonly observed bitcoin scams to help protect
yourself and your finances—Free Giveaways.” 
https://bitcoin.org/en/scams#free-giveaways
. 
↩ 
129. A fair coin is one that has a 50% chance of landing on either side when flipped. The “heads” and “tails” is a convention
when coins show images of kings, queens, or presidents on one side (“heads”). By convention, on Euro coins the side with the
national symbol is regarded as “heads.” Interestingly some research has found that the typical EU coin is not “fair,” tending to
more often land on heads. (The authors are not responsible if you try this and end up losing money 
☺
). 
↩ 

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