The mandate is built on 5 central pillars: preserve capital in down markets, generate income, beat the rate of inflation, allocate funds optimally, and to harness the power of compounding.

The benefits include not having to time the markets or sit infront of a computer screen all day feeling the pulse of the market, less stress, frustration and anxiety, and you don't have to redesign the wheel every other day. WMB is a set-it-and-forget-it strategy!

The one-two punch is comprised of a solid conservative investment strategy (WMB), and the ability to harness the power of compounding over time.

If you sock away 10% of your gross income per month starting in your early 20's, it is not unrealistic for the average WMB investor to have a portfolio end value that exceeds $1.2 million by age 65.  This assumes an 8% average annual growth rate over 45 years.  

According to the DALBAR study, the average individual investor has done a terrible job at timing the markets.  The results from 1990 - 2009 show that while the S&P 500 generated 8.2% total returns per year, the average individual investor only took 3.2% from the market.  The results on the fixed income side were even worse.  Individual investors weren't even able to beat the rate of inflation over this time period.  The lesson is: Don't try to time the markets (unless you're a pro who knows how to)!

Studies show that over long periods of time (10-20 years), fewer than 10% of fund managers actually beat their respective indices.  Since those who do charge enormous fees, the average individual investor is better off just going with low-cost gerneric benchmark index funds.

The prevailing wisdom as upheld by the modern portfolio theorists and the investment advisory community is to over-weight stocks - so individuals end up with overly aggressive asset allocations - which in turn can lead to huge drawdowns (and cardiac arrest).

Risk tolerance surveys serve as a way for financial advisors to establish bonds with their clients. Meanwhile, the markets don't know or care about the risk tolerances of Mrs. Jones, or Mr. Smith.  Investors should adjust to the risk of the markets - not the other way around.

Some of the pros include: 

•Forced savings via mortgage

•There’s no place like home

•Tax advantages (interest deductions, capital gains)

•Don’t get monthly statements

•Long-term appreciation

Some of the cons include:

•Big ticket item

•Requires household stability (emotional, situational and financial)

•No power of compounding effect

•Very illiquid

•Lots of repairs and maintenance

•Property taxes

•Requires long time horizon

•Leverage (mortgage) create high volatility of returns

This is a hard question to answer, because there are so many great reasons to own a own home.  However, starting the WMB investment program requires a lot less capital than buying real estate, and it simply requires that you set aside 10% of your gross income per month inside a Roth IRA and then re-balance your fund allocations once per year.  Why not do both?