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The Only Investment Guide You'll Ever Need (Paperback)
by Andrew Tobias
| Category:
Personal finance, Personal wealth, Investment, Self help |
| Market price: ¥ 158.00
MSL price:
¥ 128.00
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MSL rating:
 Good for Gifts |
| MSL Pointer Review:
Packed with great investment, tax and cost saving tips, this investment classic is a great introduction to personal finance. |
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Author: Andrew Tobias
Publisher: Harvest Books; Expanded & Updted edition
Pub. in: January, 2005
ISBN: 0156029634
Pages: 312
Measurements: 7.8 x 5.7 x 0.8 inches
Origin of product: USA
Order code: BA00561
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- Awards & Credential -
First published in 1978, this book has sold one million copies and is widely regarded as a classic on personal finance. |
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- MSL Picks -
The book contains a wealth of simple, sensible, wealth-building strategies. Perhaps even more important, it contains a wealth of simple, sensible, loss-avoidance strategies. And all of it is presented in an easy- to-read style, with humorous, self-deprecating stories that both enlighten and enliven. This is a seriously witty book!
Four points in particular that impressed me:
Tobias lists several kinds of investments that are so complex and have such a poor performance record that the only thing that most people need to know about them is that they should be avoided. That is very useful advice! Instead of wasting your time trying to become an expert in areas where even the experts lose money, you can spend your time more profitably in some other area.
Tobias examines the impact that taxes have on wealth-accumulation and proposes some simple strategies to avoid or minimize that impact, including IRA and 401(k) plans. That is very useful advice. Paying less taxes = accumulating more wealth.
Tobias discusses the effect that interest charges have and proposes some very simple strategies to avoid those too. That is also very useful advice. Paying less interest = accumulating more wealth.
Finally, regarding specific investments, Tobias provides some basic, common-sense strategies here, too. Tobias addresses some basic asset allocation issues, pointing out that some investments are very risky on a short-term basis, and it doesn't make sense to put short-term money in a risky investment. Tobias lists a few places where your short-term money will be safe. As for your long-term money, Tobias makes the common sense observation that investment returns cannot be predicted from year to year, but investment costs can be predicted. That being the case, it makes sense to choose low-cost investments, and Tobias lists some recommendations. That is also very good advice. Paying lower investment fees = accumulating more wealth.
In short it is possible - and now, more than ever, it's necessary! - for people to improve their financial position. This book helps show the average person how to accomplish that.
(From quoting Tim Beazley, USA)
Target readers:
General readers, especially college age students or those with little or no knowledge about personal finance.
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Andrew Tobias is the author of several bestselling books, including My Vast Fortune, and the bestselling software program Managing Your Money. A regular contributor to Parade, he has also written for Time and Worth. He serves as treasurer for the Democratic Party and lives in New York City
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From the Publisher:
For more than twenty-five years, The Only Investment Guide You'll Ever Need has been America's favorite finance guide, winning the allegiance of more than a million readers across the country. Now this indispensable book has been fully revised and updated-covering all the new tax laws-and reorganized with a new user-friendly design. Concise, witty, and truly understandable, Andrew Tobias shows you how to use your money to your best advantage-no matter how much or how little you have.
o How to spend smarter-and save $1,000 or more
o When to invest in stocks, and how
o The ins and outs of investing on the Internet
o Tax strategies, from tuition to retirement
o Whom-if anyone-you can trust to manage your money
And much, much more.
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Here you are, having just purchased a fat little investment guide we'll call Dollars and Sense, as so many investment guides are (although the one I have in mind had a different title), and you are skimming through idea after idea, growing increasingly excited by all the exclamation marks, looking for an investment you would feel comfortable with. You page through antique cars, raw land, mutual funds, goldùand you come upon the section on savings banks. Mexican savings banks.
The book explains how by converting your dollars to pesos you can earn 12% on your savings in Mexico instead of 5 1/2% here. At 12% after twenty years, $1,000 will grow not to a paltry $2,917, as it would at 5 1/2%, but to nearly $10,000! What's more, the book explains, U.S. savings banks report interest payments to the Internal Revenue Service. Mexican banks guarantee not to. Wink.
The book does warn that if the peso were devalued relative to the dollar, your nest egg would shrink proportionately. But, the author reassures, the peso is one of the stablest currencies in the world, having been pegged at a fixed rate to the dollar for 21 years; and the Mexican government has repeatedly stated its intention not to devalue. Now, how the heck are you, who needed to buy a book to tell you about this in the first place, supposed to evaluate the stability of the Mexican peso? You can only assume that the author would not have devoted two pages to the opportunity if he thought it were a poor risk to take and he’s an expert. (Anyone who writes a book, I'm pleased to report, is an expert.) And, as a matter of fact, you do remember reading somewhere that Mexico has oil-pretty good collateral to back any nation's currency. Anyway, what would be so dreadful if, as your savings were doubling and tripling south of the border, the peso were devalued 5% or 10%?
So, scared of the stock market and impressed by the author’s credentials, you take el plunge.
And for 18 months you are getting all the girls. Because while others are pointing lamely to the free clock radios they got with their new 5 1/2% savings accounts, you are talking Mexican pesos at 12%.
Comes September, and Mexico announces that its peso is no longer fixed at the rate of 12.5 to the dollar, but will, instead, be allowed to ôfloat.ö Overnight, it floats 25% lower, and in a matter of days it is down 40%. Whammo. Reports the New York Times: Devaluation is expected to produce serious immediate difficulties, most conspicuously in heavy losses for Americans who have for years been investing dollars in high-interest peso notes.ö How much is involved? Oh, just $6 or $8 billion.
You are devastated. But you were not born yesterday. At least you will not be so foolish as to join the panic to withdraw your funds. You may have bought at the top but you'll be damned if you'll sell at the bottom. The peso could recover somewhat. Even if it doesn't, what's lost is lost. There's no point taking your diminished capital out of an account that pays 12% so you can get 5 1/2% in the United States.
And sure enough, in less than two weeks the float is ended, and the Mexican government informally repegs the peso to the dollar. (Only now one peso is worth a nickel, where two weeks ago it was worth eight cents.) You may not know much about international finance (who does?), but you know enough to sense that, like a major housecleaning, this 40% devaluation in Mexico's currency ought to hold it for a long, long time. In fact, you tell friends, for your own peace of mind you're just as glad they did it all at once rather than nibbling you to death.
And then six weeks later the peso is floated again, and slips from a nickel to less than four cents. Since Labor Day, you're down 52%.
Aren't you glad you bought that book?
(Everything changes and nothing changes. That was 1976. In 1982 the peso was devalued againùby 80%. In 1995, it dropped 55%. From mid-2002 to mid-2004, it edged down 20%.)
This immodestly titled book-the title was the publisher's idea, in a weak moment I went along -is for people who have gotten burned getting rich quick before. It is the only investment guide you will ever need not because it will make you rich beyond any further need for money, which it won't, but because most investment guides you don't need.
The ones that hold out the promise of riches are frauds. The ones that deal with strategies in commodities or gold are too narrow. They tell you how you might play a particular game, but not whether to be playing the game at all. The ones that are encyclopedic, with a chapter on everything, leave you pretty much where you were to begin withùtrying to choose from a myriad of competing alternatives.
I hasten to add that, while this may be the only investment guide you will ever need, it is by no means the only investment guide that's any good. But, sadly, reading three good investment guides instead of one will surely not triple, and probably not even improve, your investment results.
The odd thing about investingùthe frustrating thingùis that it is not like cooking or playing chess or much of anything else. The more cookbooks you read and pot roasts you prepare, the better the cook-within limits you are likely to become. The more chess books you read and gambits you learn, the more opponents within limits you are likely to outwit. But when it comes to investing, all these ordinarily admirable attributes-trying hard, learning a lot, becoming intriguedùmay be of little help, or actually work against you. It has been amply demonstrated, as I will document further on, that a monkey with a handful of darts will do about as well at choosing stocks as most highly paid professional money managers. Show me a monkey that can make a decent veal parmesan.
If a monkey can invest as well as a professional, or nearly so, it stands to reason that you can, too. It further stands to reason that, unless you get a kick out of it, you needn't spend a great deal of time reading investment guides, especially long ones. Indeed, the chief virtue of this one (although I hope not) may be its brevity. This one is about the forest, not the trees. Because if you can find the right forest-the right overall investment outlook-you shouldn't have to worry much about the trees. Accordingly, this book will summarily dismiss investment fields that some people spend lifetimes wandering around in. For example: It is a fact that 90% or more of the people who play the commodities game get burned. I submit that you have now read all you need ever read about commodities.
This thing about the forest and the trees - about one's degree of perspective - bears further comment, particularly as for many of us it is second nature to feel guilty if we take the easy way out of a given situation. If, for example, we read the flyleaf and first and last chapters of a book, to get its thrust, instead of every plodding word.
I raise this not only because it could save you many hundreds of hours stewing over investments that will do just as well unstewed, but also because it leads into the story of The Greatest Moment of My Life.
The Greatest Moment of My Life occurred in the Decision Analysis class at Harvard Business School. Harvard Business School uses the case method to impart its wisdom, which, on a practical level, means preparing three or four cases a night for the following day's classroom analysis. Typically, each case sets forth an enormous garbage dump of data, from which each student is supposed to determine how the hero or heroine of the case- inevitably, an embattled division manager or CEO-should ideally act. Typically, too, I could not bring myself to prepare the cases very thoroughly.
The format of the classroom discussion was that 75 of us would be seated in a semicircle with name cards in front of us, like United Nations delegates, and the professor would select without warning whomever he thought he could most thoroughly embarrass to take the first five or ten minutes, solo, to present his or her analysis of the case. Then everyone else could chime in for the rest of the hour.
On one such occasion, we had been asked to prepare a case the nub of which was: What price should XYZ Company set for its sprockets? Not coincidentally, we had also been presented with a textbook chapter containing some elaborate number-crunching way to determine such things. The theory behind it was simple enough-charge the price that will make you the most money-but the actual calculations, had one been of a mind to do them, were extremely time-consuming. (This was just before pocket calculators reached the market.)
The professor, a delightful but devious man, noting the conspicuous absence of paperwork by my station, had the out-and-out malevolence to call on me to lead off the discussion. I should note that this occurred early in the term, before much ice had been broken and while everyone was still taking life very seriously.
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Cota (MSL quote), USA
<2007-01-12 00:00>
As a young and overwhelmed newlywed twenty-some years ago, I read The Only Investment Guide You'll Ever Need. It was clear, fun to read, and full of good advice. I was recently surprised to see it is still in print, revised and updated.
If you're already the sort of person who reads personal finance books, it won't be the only one you'll read, but it may be the one that holds up the best over time. Tips such as "invest" in staples such as coffee when they are cheap and ride out times of inflated prices by using your surplus are as useful today as they were in 1978. (Although if I remember, Tobias used canned tuna as the example in the earlier editions, and now uses cases of wine to illustrate the point.)
Tobias has updated the book to include investment advice that we never considered in 1978. He includes tips on how to find the best online air fares, when and when not to use eBay, TiVo, and reverse mortgages. He has some simple and effective ideas on how to make Social Security viable for the foreseeable future (without resorting to privitization). He gives specific advice to couples who are married and couples who aren't or who can't be.
One of my favorite sections is on what to do if you win the lottery. How many long drives have I passed by planning that very thing? (My first step: get an unlisted phone number.) Tobias's advice on this unlikely event is excellent, especially step 5b.) Don't buy a boat.
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David Lubin (MSL quote), USA
<2007-01-12 00:00>
Not only does Andrew Tobias suggest that readers save and invest, but also shows real ways that people can spend less (through conservation, stocking up on essentials at warehouse prices, saving money on insurance (auto, life, etc), paying yourself first, etc). Additionally, he explains investment vehicles in simple layman terms while divulging his personal opinions. All of this is done in a humorous, witty and quick read...a pleasant surprise to those of us picking up Investment Guides. Tobias truly covers it all, from savings accounts, to options and everything in between such as treasuries and annuities. He also discusses the merits of self-directed investing. It is telling that he dedicated the book "To my broker - even if he has, from time to time, made me just that." This is a must read for those seeking entry-level knowledge of the ins and outs of investing or simply a witty read on the topic. |
Chris Hudson (MSL quote), USA
<2007-01-12 00:00>
This is a good book. Tobias' main point is that you need to start saving 10% of your income, and he also gives advice on ways to cut costs and where you can put your money. I've read a lot of investing books and some of what he said was not new to me. However, I did learn some new things. Some parts of the book that I found helpful were Chapter 5 which explains Treasuries (bills, notes, and bonds). I also liked his advice in Chapter 10 about what to do if you fall into a large sum of money (Lottery or inheritance). There are also some useful resources in the appendices in the back of the book such as contact info for discount brokers, mutual funds, a compound interest chart, and finally a quick summary of his main point (save 10% of your income). I gave the book four stars instead of five because I don't agree with ALL of his advice, for example I do not believe in purchasing rental properties (too big of a headache), and I think that home equity loans are a BAD idea. Other than that, a great book. |
Jim McDuffie (MSL quote), USA
<2007-01-12 00:00>
I have found the advice in this book to be invaluable. You simply can't go wrong. Those looking for a book with stock/mutual fund investing howtos should keep looking however. This is a broad brush stroke at handling one's money. Period. If you are going to read this book, be sure to read My Vast Fortune as well. The two tell quite a story and show that Mr Tobias is not just blowing air between his gums. This book is eminently readable and there is just not much wrong with it. Everything from what to do if you inherit wealth, to what type of life insurance to buy, to how to buy a car, to how to use the internet to save money on staying at a hotel are covered, as well as everything in between. Read this and prosper. |
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