12 STEPS TO BE A ZEN MILLIONAIRE

The principles of 'inner peace' shared by the unlikely trio of Warren Buffett, Buddha and Vanguard's John Bogle can provide a relaxed guide to investing happiness. By Paul B. Farrell, MarketWatch Last May, 35,000 shareholders crowded into Berkshire
Hathaway's (BRK.A, news, msgs) annual shareholders meeting. One of the faithful asked a fundamental question: "What is the secret to value investing?" According to an article in Harper's Magazine

-- "The Church of Warren Buffett: Faith and Fundamentals in Omaha" -- Buffett replied with all the serenity of the Buddha: "Independent thinking and inner peace." Independent thinking is the traditional left-brain wisdom you'd expect from a Western leader.
But inner peace? That's hot Eastern wisdom served with down-home Nebraska wit by Buffett the Buddha.

[1]	Zen first -- get it before you get the million
	Buffett the Buddha was born with it. "I am really no different from any of you," he says. "I may have more money than you, but money doesn't make the difference. Sure, I can buy the most luxurious handmade suit, but I put it on, and it just looks cheap. I would rather have a cheeseburger from Dairy Queen than a $100 meal. . . . If there is any difference between you and me, it may simply be that I get up every day and have a chance to do what I love to do." And he still "tap-dances into work every day."
[2]	Your mind creates money
	"We are what we think," Buddha says. "Our thoughts create our world." Today, Wall Street's thoughts are driven by a mindless, obsessive addiction to get rich quick, creating a world of endless self-destructive bubbles. In contrast, Buffett creates long-term wealth. "One of the keys to Buffett's success," says an admirer, "is compounding. . . . If you put $2,000 a year into an IRA for just eight years, until you are 27, when you retire at age 65 the $16,000 will have ballooned to over $1 million. You do not need unusually high returns to make good money with compound interest, but you do need to be consistent." Bogle adds: "Investing is all about common sense. Owning a diversified portfolio of stocks and holding it for the long term is a winner's game. Trying to beat the stock market is theoretically a zero-sum game (for every winner, there must be a loser), but after Wall Street's substantial costs of investing are deducted, it becomes a loser's game."
[3]	Being rich is 'nothing special'
	Ancient Zen masters warned students that enlightenment is "nothing special." Neither is having a million. Nor even a billion, to Buffett. "Of the billionaires I have known, money just brings out the basic traits in them," he says. "If they were jerks before they had money, they are simply jerks with a billion dollars."
[4]	Investors play a lazy game of solitaire
	The Buddha: "Believe nothing, no matter where you read it or who has said it, not even if I have said it, unless it agrees with your own reason and your own common sense." Bogle introduced us to the Lazy Portfolio doctrine: "Start with the total stock market index. The idea is to own the stock market, own every company in America, and hold it for Warren Buffett's favorite holding period: forever. And that's the secret: Own everything, and hold it forever. TheS&P 500 ($INX) is about 80% of the value of the total stock market." The Wilshire 5000 (WFIVX) is a great alternative. The eight Lazy Portfolios had a successful year in 2009, riding the turmoil with inner peace. Just before Christmas, all eight no-load index portfolios had one-year returns averaging 24% to 33%. The Second Grader's Starter Portfolio consists of just three funds, including the Bogle-recommended big-cap index fund plus the Total Bond Index (VBMFX) and Total International Stock Index Fund (VGTSX). The portfolio's 33.3% returns beat the S&P 500, proving Buffett's point that "a great IQ is not needed to do well as an investor," just "the ability to detach yourself from the crowd." We know the crowd will focus on the two hottest funds in the eight Lazy Portfolios: Vanguard's Emerging Markets Stock Index (VEIEX) was smoking at 79% this year, and its REIT Index Fund (VGSIX) at 39%. But remember: Diversify, don't just trade hot funds of stocks.
[5]	No outside authorities; you are centered within
	"The future is never clear," Buffett warns. "You pay a very high price in the stock market for a cheery consensus." Strategy: Don't do trading; buy value; never sell. "I never have the faintest idea what the stock market is going to do in the next six months or the next year or two," Buffett says. "But I think it's very easy to see what's going to happen over the long term."
[6]	You are always a beginner
	Zen masters say, "Zen mind, beginner's mind." Step into Buffett's Zen mind and meditate: "I'm going to buy hamburgers for the rest of my life. When hamburgers go down in price, we sing the 'Hallelujah Chorus' in the Buffett household. When hamburgers go up, we weep. For most people, it's the same way with everything in life they will be buying -- except stocks. When stocks go down, you can get more for your money, but people don't like them anymore. That sort of behavior is especially puzzling."
[7]	You must make peace with the dark side
	"It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently," Buffett says. And there's this widely cited Buffett quote as well: "I want employees to ask themselves whether they are willing to have any contemplated act appear on the front page of their local paper the next day, be read by their spouses, children and friends. . . . If they follow this test, they will not fear my other message to them: Lose money for my firm, and I will be understanding; lose a shred of reputation for the firm, and I will be ruthless." Meditate on working for Buffett every day . . . you'll get the "Zen first."
[8]	Wealth building is about building character
	Today Wall Street's addiction to massive wealth is creating an America with the mind of a teenager on speed, hellbent for instant gratification. "Investors should remember that excitement and expenses are their enemies," Buffett says. "Success is getting what you want. Happiness is wanting what you get." Meditate on this: Who are you? Are you a money machine or rich in integrity?
[9]	You are the only guru
	Bogle offers a practical reason for being your own guru: A decade ago, "the total revenues paid by investors to investment bankers and brokerage firms exceeded $1 trillion," and "more than three-quarters of the cumulative financial wealth produced by stocks over an investor's lifetime will be consumed by fund managers." You cannot trust Wall Street. Zen masters warn: "If you meet the Buddha on the road, kill him." Why? Because Buddha is never "out there." Not on CNN. Nor at Goldman. Not even Buffett. You're it.
[10]	You're on a never-ending journey of self-discovery
	"You do things when the opportunities come along," Buffett says. "I've had periods in my life when I've had a bundle of ideas come along, and I've had long dry spells. If I get an idea next week, I'll do something. If not, I won't do a damn thing. . . . You only have to do a very few things right in your life so long as you don't do too many things wrong." You're on Earth for a reason. Not just to get rich. What is it? That journey never ends.
[11]	You are making a difference
	"It's class warfare, and my class is winning, but they shouldn't be," Buffett says. "If you're in the luckiest 1% of humanity, you owe it to the rest of humanity to think about the other 99%." Most don't. So it's no surprise that Buffett's actions speak louder than words: The richest man on Earth is giving away all of his fortune.
[12]	The secret power within you
	Life and investing are simple for Buffett: "We enjoy the process far more than the proceeds." He has lived in the same modest house for years and drives an old car. The computer in his office is used only for playing bridge with friends around the world. He knows you get the Zen first, or you don't get it. The secret? "Independent thinking and inner peace." "I can only to point the way for you," Buddha says. "Be a lamp unto yourself." And if you wonder how you'll ever know if you got the "Zen first" secret (because Buddha also says, "You may be enlightened but never know it"), I'll bet Buffett would reply with something like: "You'll know you're enlightened when you sense inner peace while tap-dancing with your portfolio." At least I hope he'd say something Nebraskan like that. Bottom line: There's no secret to the Zen. If anything, it's too simple. Zen is within you.