Smartest investment book you'll ever need?
Even Ramit Sethi, the newest hottest personal finance guru agrees about this book (The Smartest Investment Book You’ll Ever Read: The Simple, Stress-Free Way to Reach Your Investment Goals
.) - he says “this is one of my favorite investing books.” On his blog, I Will teach You How To Be Rich h dissects the book and comes to the conclusion that it is smart, concise, and doesn’t come with any fertilizer to grow the author’s stature. As in, no bullshit. Works for me!
So why do I say the book is only one sentence long?
“In a Smart Investment portfolio, you hold investments in a group of funds that, in turn, have investments in all the securities (stocks or bonds) in a particular index.”
Yup, that’s it. Of course, there are a couple hundred pages afterward explaining the nuts and bolts of how you are going to implement this:
This is from a treatise of the book that further distills the rest of the book (emphasis is mine):
Solin recommends that investors follow Four Steps
1. Determine your asset allocation based upon your personal parameters (Note: author provides a multi-page asset allocation questionnaire to determine a specific score for each individual’s circumstances and risk tolerance).
2. Open an account with Fidelity Investments, Vanguard or T. Rowe Price.
3. Set up your portfolio among three specific no-load, low internal expense index funds in any of the three fund families representing the total U.S. stock market, international market, and U.S. bond market, or purchase three specific similar in composition ETFs.
4. Rebalance the portfolio twice a year.
It’s common-sense advice - particularly when Solin says that you do not need advisors, managers, etc to invest for you - if you’re investing an American family average (my investment fund is obviously much lower than some, but sadly, much higher than many), all they are are extra fees paid to ‘churn’ your investments, making it look like they are trying to make you extra money just by flipping around your portfolio. I’ll talk more on this in a later post, and share an experience a friend of mine had. Furthermore, I have lots more to say about this particular book, which I just happened to pick up from the library not because I knew anything about it or had heard anything about it, but because it was short. Lucky me!
![[Post to Twitter]](http://lateinvestor.com/wp-content/plugins/tweet-this/icons/tt-micro3.png)
I’m reading a new book about beginner investor strategy, and how to start investing: The Smartest Investment Book You’ll Ever Read: The Simple, Stress-Free Way to Reach Your Investment Goals. So far I like the tone and tiblre of the book - basically it’s saying that trying to time the markets or beat the markets by picking stocks is a fool’s game and a waste of money. It goes on to point out something that I knew before I even started learning about investing - people you pay to manage your stock portfolio do not have your best interests at heart. Now, before I get angry emails (or tweets - I’m on twitter too as the LateInvestor - are you? Add me if you’re into investing - I won’t auto-follow/auto-dm auto-reply or spam you with links to e-books - I am a real person, not a marketroid) from money manager’s, please know that it’s nothing personal. Just a fact of life that if you get paid to make trades for people and try and beat the market, then you will make lots of trades in hopes of beating the market. I suppose if it pans out, you could make some cash - but the law of averages would say the odds of that happening are pretty low, I suspect. I just assumed everyone would be as naturally conservative and suspicious as I am - I want to get hands on with my investment portfolio, right from the beginning, not just offshore it to some guy with 1 thousand other small time investors he lumps together and moves around like monopoly pieces.
Vanguard, which according to Investing Online For Dummies
, is the world’s largest Index mutual fund. I’m not in the book far enough to know what that actually means, but they do reference this site, and it’s creator, John Bogle several tmes in the first few chapters of Investing Online For Dummies.
On the Vanguard website, they do something that I wish more sites and online brokerages would do - they offer a widget that lets you change values and see results in terms of dollars. In this case, it’s a sliding widget that shows potential savings by investing in the Vanguard mutual fund. It’s marketing, usre, and may not be entirely accurate - but it just goes to show they understand their market - the hands-on personal investor. Or in mycase, someone whos hesitant about any investment, and wants something tangible and hands-on to let me use their site without actually signing up or even inputting my contact information. Just thought I would mention this - something to learn from if you’re a bsuiness owner with a website.
Hi, my name is Jeff. I am a 36 year old software developer living in Las Vegas NV. I am married, with 2 children. I know nothing about investing money. 
