Richer, Wiser, Happier discusses the principles, process, insights, habits, and personality traits that enable a tiny minority to beat the market in the long run. The author would like to reverse engineer these investors’ winning ways. This book is recommended by a columnist on Forbes website. I would like to learn the winning ways of these great investors.
William Green is an author and editor. He has written for many leading publications in the US and Europe. Besides that, he has interviewed a number of most successful investors.
Richer, Wiser, Happier is made up of an introduction (Inside the Minds of the Greatest Investors), 8 chapters and an epilogue (Beyond Rich).
The 8 chapters are 1) The Man Who Cloned Warren Buffett, 2) The Willingness to Be Lonely, 3) Everything Changes, 4) The Resilient Investor, 5) Simplicity is the Ultimate Sophistication, 6) Nick & Zak’s Excellent Adventure, 7) High-Performance Habits, and 8) Don’t Be a Fool.
Richer, Wiser, Happier features a number of investors. The author thinks that by studying these investors, we could learn not only how to become rich, but also to improve our decision making skill.
Investing is about calculating the odds, thus there is no certainty. It is about waiting for rare moments when the odds of making money vastly outweigh the odds of losing it. Life and investing are similar in the sense that they are games in which we must consciously and consistently seek to maximise our odds of success.
The investors in this book has different styles with some prefer concentration and some prefer diversification and each is successful. So, we should devise an investing strategy that suits us. Do not do what you do not want to do or what is not right for you. There is also no shame in cloning successful investors, as long as you are able to stick with the strategy.
Do not cling to or rely on what cannot last. In both investing and life, problems arise when we expect or yearn for things to stay the same. Even Warren Buffett keeps on evolving, instead of sticking with the same strategy as the economic environment changes.
Investing entails risk. Risk is not for embracing or eschewing, but to bear it intelligently while never forgetting the possibility of an unpleasant outcome.
Some advice that resonate with me include
- Goes for simplicity in investing.
- Take little note of what others think about you – care more about being right and winning than gaining social acceptance approval.
- Control emotion.
- Know what you do not know.
- Be patient.
- Do not chase fads.
- Money cannot buy everything, but it can buy free time.
Every chapter in the book discusses not only the main character, but also other characters who are similar or are the inspiration of the main character. The author will give his own opinion and comment on his own investing behaviour. He ends each chapter with a summary and lessons he has learned from the main character.
I do not know every investor in the book, such as Marie Eveillard and Jeff Vinik. However, each person in this book has proven record of Investment success. It takes hard work to be a successful investor, but the people in the book really enjoy investing. Perhaps that is one of the reasons for their success.
The Notes on Sources and Additional Resources contain some insights of the author, so you should not miss this part.
Overall, I really like this book. It is easy to understand and not boring. I feel it will bring new realisation every time we read it. So, I plan to reread it once in a while to get new inspiration for my investing strategy.
- The only way to beat the market is to diverge from the market.
- Any asset, however ugly, can be worth buying if the price is low enough.
- It is rarely a mysterious technique that drives us to the top, but rather a profound mastery of what may well be a basic skill set.
- Resounding victories tend to be the result of small, incremental advances and improvements sustained over long stretches of time.
- Nothing matters more than averting obvious errors with the potential for catastrophic consequences.
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