95% of this book is variants on the theme "don't be stupid." I was amazed at how many ways an author managed to say this. The rest is a mildly useful 95% of this book is variants on the theme "don't be stupid." I was amazed at how many ways an author managed to say this. The rest is a mildly useful compendium of other books, websites, publications, and software packages for day traders. Almost never does it mention how to actually, you know, day trade....more
Spends 2/3rds of the book reminding you over and over again to do your homework and use the tools, but then forgets to assign the homework and offer sSpends 2/3rds of the book reminding you over and over again to do your homework and use the tools, but then forgets to assign the homework and offer specific tools. The other 1/3rd is fairly useful, enough to make it worth reading, but there are probably meatier books out there....more
It's not that this book is useless or that taking his advice won't improve your finances. It's that you will have to swallow a lot of, well, fibs alonIt's not that this book is useless or that taking his advice won't improve your finances. It's that you will have to swallow a lot of, well, fibs along the way. They're mostly not outright lies. For example, it's technically true that a lot of people get into trouble with debt. But that is not a sufficient basis for his opinion that debt is completely useless and can serve no purpose, for anyone, ever. A lie? No. Just a misleading opinion masquerading as a fact. A fib.
Debt is really just utilizing future earnings to fund today's projects. If you have a strong certainty of those future earnings and that today's projects will help lead to those earnings, then debt makes a lot of sense, especially if the interest rates are low. This is why mortgages are a fantastic form of debt, but even that he stupidly wants you to pay off ASAP. Debt also offers leverage for investments. Most businesses, even the biggest and most solid ones, utilize debt very strategically. It's bad management not to. Amusingly, he lists exactly three companies that do not utilize debt. This is called cherry picking.
He hates debt so much that he eschews credit cards entirely, even when you can pay them off consistently. He thinks you should carry a big wad of bills with you everywhere you go, and he insists doing so is safe. That's ridiculous. Only cut up your cards if you find you can't handle them responsibly, in which case use a debit card, not a wad of cash.
He also recommends not signing up for debt management. That's a bizarre one. Does he think the debt would disappear otherwise? All debt management does is lower interest rates, which can save borrowers thousands of dollars. The cost is pretty low, and there's no impact on your credit score. So it's kinda a no-brainer. His real fear seems to be that people will believe that debt management is a cure for debt troubles. It isn't. It's just a band aid. You still need to do the healing. Why not just say that, rather than recommending people avoid debt management entirely?
After his many rants and not-awful-but-not-great advice like the examples above, I found myself distrusting and doubting him, so I started fact checking him. He claims that bankruptcy is permanent because every loan application will ask if you've EVER declared bankruptcy. I found this odd, so I looked up some sample loan applications online, and none asked this question.
I think what he's doing is engaging in what are called "noble lies." He's stretching the truth and exaggerating in the attempt to instill fear and a kind of allergic reaction to anything even slightly dangerous financially. He wants to keep things simple and he thinks most people can't handle nuanced answers.
Which brings me to religion. Yes, religion. What the hell are Bible verses doing in a finance book? You don't see Indian writers sticking in quotes from the Bagavad Gita in their texts. Because that would be silly and completely irrelevant. But there's a certain kind of religious person--and Ramsey is one--who believes their religion is the source of all wisdom, for all people, irrespective of their culture or faith. Therefore they insist on injecting it into everything they do and say, annoying everyone else to no end.
Such religious people tend to have an all-or-nothing attitude about sin. I think they figure this covers all bases, that some people can get into trouble by engaging in certain risky behaviors, so therefore all people ought to renounce them entirely, with fire-and-brimstone language, just to be sure. I think they also find it comforting to have pat yes-or-no answers on all questions. In reality what it very often does is alienates people when they discover you're lying about or greatly exaggerating the dangers of said sins. Debt, for Ramsey, is a financial sin. Dollar bills are sacred. He's basically just applying his religious attitudes of right-and-wrong, good-and-bad, noble-and-evil to money. And, just as with most human behavior, reality is so much less cut and dried.
But all that aside, he's not wrong that if you will live like no one else, later you can live it up like no one else (I had to add "it up" to this phrase because otherwise it is circular and meaningless). He's not wrong that debt is dangerous and ought to be used cautiously. He's not wrong about the majority of money troubles being our own bad behaviors rather than insufficient knowledge. He's not wrong about the process you should take in repairing your financial problems and building wealth. But he fibs and rants a lot along the way....more
This is a pretty awful guide to early retirement and financial independence. He talks about the subject only tengentially, while the main content of tThis is a pretty awful guide to early retirement and financial independence. He talks about the subject only tengentially, while the main content of the book is his philosophies about living, working, spending, and education. For example, he spends a chapter on the differences between the renaissance man, businessman, working man, and salary man, complete with a graph broken into four quandrants. In another chapter, he talks about how some expertise is "modularized" or "strongly connected."
In the second section, he gives a list of ways to save money that will probably make you feel very badass and all, but won't save you much money (taking cold showers, seriously?). He goes on at length about not-very-useful information such as the optimal design of an efficient house being rectangular. When discussing whether it's best to rent or own, he gives you the NAV equation and capitalization rate. When discussing health, rather than talking about things like, oh I don't know, how to save on health care?, he gives a tutorial on functional fitness and high-intensity interval training.
The very end of the book is about finances. Only in passing does he mention vital information like withdrawal rate and how to invest for income, only to focus on pages of mathematical equations with no explanation.
When it was over, I felt like I just watched a physicist mentally masturbate for hours. I got nothing from this book, and if I were the target audience, it would have only served to discourage me from financial independence. Luckily, I'm already financially independent, and I know it does not need to be nearly this complex or "extreme." But even if it did, this book contributes nothing to the subject. I know his idea was to give "strategies and tactics" not a game plan, but the details are kinda important. It's not like a thorough bibliography was supplied, either. 1984 and The Fountainhead don't count....more
I was hoping for a book on frugal travel tips. You know, good times of year to book flights and hotels; clever ways to shop around; alternate forms ofI was hoping for a book on frugal travel tips. You know, good times of year to book flights and hotels; clever ways to shop around; alternate forms of travel; staying away from mainstream tourist attractions, opting instead for the back roads; that sort of thing. Instead what I got was various ways the author cheated travel companies and others, abusing their promotional activities for his own benefit.
A lot of various promotions interact with each other in complex, unanticipated ways. For example, the US Mint had an offer for $1 coins, offering free shipping. So, these jerks come along and buy hundreds of thousands of them with credit cards that give frequent flyer miles, scoring free trips around the world at someone else's expense.
Or the checking accounts and credit cards that try to entice people to sign up by offering frequent flyer miles. So people come along and sign up for tons of these accounts, right up to the limit before they start destroying their credit ratings, and then close the accounts once they get the miles. This creates a lot of wasted work and resources that these companies have to pay.
There's a chapter on how to take advantage of companies' mistakes. Once a traveler catches it, they'll announce it on a blog, and hundreds of travelers take advantage of the mistake before the company catches on and fixes the mistake. Of course, the companies don't have to honor the mistakes, but it's bad business not to.
The ethical thing to do is to tell the companies of their mistakes, rather than sticking them with the bill for your travel. Instead, this book warns at the end: "Never call the airline or hotel if you suspect you have found a Mistake Fare. Others are trying to book the offer as well."
As if the content of the book wasn't bad enough, the grammar and writing are truly awful. The breezy style and clichés make it read like an amateur blog....more
This book isn't about retirement--it's about aging. It talks about retirement and retired people, but most of them are still working. The only differeThis book isn't about retirement--it's about aging. It talks about retirement and retired people, but most of them are still working. The only difference between them and people who aren't "retired" is that they're old. Retirement and getting old are completely different things. I retired when I was 32 years old. There are people who get old and never retire. The way I see it, if you're still working, then you're not retired; if you've permanently left the work force, then you're retired. It's fine to go back to work, or change careers, or whatever, but that's not retirement just because you're old.
What this book is really about is how to age gracefully. It talks about things like keeping busy, staying in shape, keeping in touch with family and friends, having fun, nursing homes, travel, and investing. Most of the book is just bland advice about how to stay active and stuff when you get old. That's not exactly a mind-blowing, new piece of advice, so it's amazing that it takes so many pages to say it. A lot of this is spent on telling the stories of old people who mistakenly call themselves "retired."
Despite its subtitle, this book says very little about how much money you need to retire. Its advice is somewhere between mediocre and decent. It advocates low-cost index funds, which is nice, but some of the other advice is not all that great. It suggests you cut up all your credit cards, and count on inheritance money from relatives dying off....more
This is a pretty well done photographic journal of average families around the world, along with their material possessions. It's mostly a picture booThis is a pretty well done photographic journal of average families around the world, along with their material possessions. It's mostly a picture book, with large, beautiful photographs of one family per country. The main photo is of the family with nearly all its possessions, taken outside. Then there are several pictures of the family as they go through their day, cooking, working, shopping, even bathing. There are some statistics to accompany each country, and each family, to give a sense for how they compare with others.
Obviously, the creators of this project thought of it as a peace mission, that the best way to foster peace is to foster understanding of each other. I knew what to expect going in, and yet I did find myself surprised to see some of these photos. The discrepancy in material wealth is pretty drastic. I expected the richest to be the USA, but it was actually Kuwait. Something else that was interesting was that their facial expressions tended to match the political atmosphere more than the economic situations. It was also interesting to see just how much influence religion has on people's lives.
It was neat to take a photographic tour of the world, visiting with average families, and vicariously getting a taste for their lives....more
When did Dummies books stop being for dummies? I despised these books for so long, resenting the idea that everything should be dumbed down to the lowWhen did Dummies books stop being for dummies? I despised these books for so long, resenting the idea that everything should be dumbed down to the lowest common denominator. It was only after I've exhausted every value investing book I could find that I finally held my nose and got Value Investing for Dummies. Wow! This book doesn't mess around. Sure, it's got all the Dummies icons and comics, with the occasional irreverence, but this book is definitely not dumbed down. It's the only decent value investing book I've ever read. I finally feel like I "grok" value investing, seeing how the value investing philosophy fits together with the nitty gritty calculations.
It is thorough. It explains the philosophy of value quite well, and dives in deep to the business fundamentals, balance sheets, cash flow statements, earnings statements, all the useful ratios for analyzing a business, intrinsic value calculations, all along using an actual company's financials as an example. It also talks about Warren Buffett's investing philosophy, when you should buy and when you should sell, intagible business features, and even REITs, mutual funds, and ETFs. It ends with a summary of ten signs of value, ten signs of unvalue, and ten habits of successful value investors. In other words, everything you really need, and then some, all in a very readable and well-organized book.
I would have liked to see a chapter that walks you through the whole process, from beginning to end. The stock screen, the thought-processes behind which companies to look into further, the research of a company, the choosing of a company, the purchase, the ongoing analysis, and the sale. It wouldn't need to go into detail, just reference page numbers where those details are given. Otherwise, I have no gripes about this book.
ADDENDUM: I've read this book three times now because value investing is not easy, and it goes against our instincts. I have a new gripe about this book though, which is that it wears out its welcome toward the end, in the attempt to repeatedly summarize....more
If you're looking for a concise overview of value investing in relatively plain English, this is a decent book. If you want details, examples, or thorIf you're looking for a concise overview of value investing in relatively plain English, this is a decent book. If you want details, examples, or thorough explanations, look elsewhere....more
A fabulous book about the most popular theories and strategies employed in the attempt to tame investing: index funds, value investing, bonds, growth A fabulous book about the most popular theories and strategies employed in the attempt to tame investing: index funds, value investing, bonds, growth investing, international investing, real estate, alternatives, asset allocation, short selling, hedge funds, and behaviorism. This book is amazingly readable and entertaining for a subject as dry as investing. The author has a knack for storytelling. If you read it, you will be more fascinated and amazed than informed, but I guarantee you will also understand a whole lot more about investing, its history, and the theories around it. If you already know about the subjects it covers, you likely won't get much out of it, but it's still worth reading nonetheless, if for no other reason than its balanced approach of weighing the pros and cons of all the different theories, with honesty and candor....more
This book makes an interesting case that the real estate market was only one of many economic bubbles to pop. The next two--the dollar and government This book makes an interesting case that the real estate market was only one of many economic bubbles to pop. The next two--the dollar and government debt bubbles--will make that one look like a blip by comparison. The prediction: hyper-inflation of 10%+ by the decade's end. This will cause everything to crash all at once. It will be the Great Depression all over again. The only place you're safe is gold and other precious metals, and shorting.
Though an interesting case, it wasn't a very strong one. It certainly made me pay more attention to the huge government debt and reckless money printing by the Fed. I do agree there will be some inflation ahead. 10%? Another Great Depression? Probably not. Maybe it's just wishful thinking, but I'll give you my reasoning.
1. I have a good bullshit alarm, and it was ringing a lot when I read this book. It reads like an infomercial, at least in some places. There are three authors, and maybe only one of them makes me squirm the way a used car salesman does. And whenever I start thinking, "wow, it's going to be tough to find safe investment opportunities in this new economy we'll be in!" I would see a little blurb about their financial planning firm. Probably not a coincidence.
2. I doubt their authority. The book is based on the premise that the whole field of economics is out to lunch, so you shouldn't trust them. Instead, trust these three folks. Wait, who are they again? Oh yeah, the infomercial people trying to sell me their investment advice. Their reasoning: they predicted the first financial meltdown, whereas the economists were dead wrong. That's called anecdotal evidence. One correct prediction is not enough for me to throw away all the investment wisdom I've gotten from academic economists, and trust in three obscure financial planners.
3. Though they differentiate themselves somewhat from the other Chicken Littles like Peter Schiff, they do sound a lot like the loony Austrian school of economics, who insist the sky really is falling if only the government would let it. To some extent, there is sound economic reasoning beneath it--like the dangers of printing money causing rampant inflation. But I understand trade-offs, and I'm quite sure the Fed does too. Healthy markets are based on trust and safety. Panics erode that trust. Do I completely trust the Fed to get it right? No. Do I trust them more than these three clowns? Absolutely.
4. Gold is a bubble too. It's such a bubble that the last couple centuries of gold prices look like a flat line by comparison to the last decade. These authors admit this, but they say that the other bubbles will collapse first. So invest in gold, wait for the other bubbles to pop, let gold really skyrocket, and then get out before everyone else! Except that's probably what "everyone else" will be thinking too. Gold feels much less safe than stocks right now, especially since stocks are productive businesses, whereas gold is just a rock. Maybe there's nowhere safe to put my money except under my mattress. Oh, wait. This hyper-inflation will destroy that too. My bet? The same one economists have been pushing since before economics existed, in fact all the way to the dawn of modern civilization: diversification.
I might be wrong. If I am, I will regrettably eat my words, and will take a long hard look at these Austrian economists. I hope I won't be too busy hoarding food rations to update this review with an apology and a five star rating.
UPDATE (04/15/2020): I originally wrote this review eight years ago, and I said if I was wrong, I would update it with an apology. Well, I was right. The book made predictions about what would happen by 2020, so let's see how they did. The inflation rate is not even close to the 10%+ they predicted. It has held very steady and currently stands at a tiny 1.54%. As for investing in gold, let's see how $10,000 would have done if I'd invested it in gold like they recommended. If I bought SPDR Gold Shares, it would be worth $13,600 today. If I instead bought $10,000 of Vanguard S&P 500 ETF, it would be worth $20,491. That's not even counting the 2.24% dividend rate in the S&P 500, which alone is higher than any savings account.
UPDATE (05/14/2023): Oh, well, hello inflation! But taking the advice in this book would not have done a damn thing to protect an investor. And still waiting for that next global financial meltdown. I still might be wrong....more
A broad, thorough book about investing. Actually, to call it thorough is an understatement. He hits pretty much every topic that could conceivably ariA broad, thorough book about investing. Actually, to call it thorough is an understatement. He hits pretty much every topic that could conceivably arise in ones investing adventures. Frugality, taxes, stocks, bonds, brokers, mutual funds, family planning, living wills and trusts, insurance, budgeting, index funds, load funds, IRAs, 401(k)s, options, futures, margin, CDs, economics, even politics. Quite a bit more is covered, but that's all I can remember right now.
He definitely advocates asset allocation and index funds, in general, but he's not an ideologue who thinks that's the One True Way. He discusses lots and lots of other approaches, explains why they might be advantageous, but also warns away from them.
The writing is fun and engaging, easy to follow along with, sometimes a little silly, but it's not dumbed down. You will learn from this book, unless you know everything you need anyway. For experienced and knowledgable investors, like myself, this book is fairly basic. It didn't wow me. My biggest gripe is that, by the end, despite this huge brain dump of information, I don't feel a newbie investor would be able to construct a clear and effective investment strategy. For that reason, I would argue this book is NOT the only investment guide you'll ever need, though it certainly would help.
Instead, I recommend three books: A Random Walk Down Wall Street for an overview of investing, particularly explaining why it's nearly impossible to beat the averages. Common Sense on Mutual Funds for an understanding of the mutual fund industry, and the absolute importance of keeping fees down. All About Asset Allocation for a nuts-and-bolts guide for constructing a portfolio of stocks and bonds....more
Loading...
