The Only Investment Guide You’ll Ever Need is a book recommended by some reading blogs that I stumbled upon. I found the title to be interesting – is this seriously the sole guide that I ever need? So, I decide to find out if the claim is true.
Andrew Tobias is an American writer with 12 books published in the fields of investment, politics, insurance and others. He was a contributing editor to several magazines such as New York Magazine and Esquire. He sold Managing Your Money software in the early days of personal computers. Prizes awarded to him include Gerald Loeb Award for Distinguished Business and Financial Journalism, Harvard Magazine’s Smith-Weld Prize, GLSEN’s first Valedictorian Award, and the Consumer Federation of America Media Service Award. He was the Treasurer of the Democratic National Committee from 1999 to 2017.
The Only Investment Guide You’ll Ever Need has a preface, an introduction (The Big Picture), 11 chapters organized into 3 parts, and 9 appendixes.
Part 1 is Minimal Risk. There are 6 chapters here. These chapters are 1) If I’m So Smart, How Come This Book Won’t Make You Rich?, 2) A Penny Saved Is Two Pennies Earned, 3) You CAN Get By on $165,000 a Year, 4) Trust No One, 5) The Case for Cowardice, and 6) Tax Strategies. This part is mainly about how to maximize your income and minimize expense.
Part 2 is The Stock Market and has 3 chapters. These chapters are 1) Meanwhile, Down at the Track, 2) Choosing (to Ignore) Your Broker, and 3) Hot Tips, Inside Information – and Other Fine Points.
Part 3 is Family Planning. There are only 2 chapters and they are Kids, Spouse, Heirs, Folks, and What to Do If You Inherit a Million Dollars; What to Do Otherwise.
The appendixes in chronological order are 1) Earning 177% on Bordeaux, 2) How Much Life Insurance Do You Need?, 3) How Much Social Security Will You Get?, 4) A Few Words About Taxes and Our National Debt, 5) Cocktail Party Financial Quips to Help You Feel Smug, 6) Selected Discount Brokers, 7) Selected Mutual Funds, 8) Fun with Compound Interest, and 9) Still Not Sure What to Do?
The first edition of The Only Investment Guide You’ll Ever Need was published in 1978 and this current edition is revised in 2016. The author claimed that this is the only investment guide we will ever need not because it will make us freaking rich but because we do not need most investment guides on the market. However, he also said that this book is not the only investment guide that is any good.
According to the author, the financial market rewards 3 attributes: volume, patience, and risk. But the same refrain applies: the rich get richer. So, it is important to increase our available capital.
Some other investment advice include start to invest as early as possible, and long term growth almost certainly comes from stocks, real estate or own business (or perhaps all 3). Moreover, refrain from derivatives such as options and futures as they can ruin us easily.
Regarding how we should spend or invest money, the author proposed that we answer these questions: Who am I? What am I trying to do with my life? Is money the means or the end? Based on our answer, we can adjust our spending or investment accordingly.
Some other notable lessons that I remember are the author advocated no-load index funds, denounced charting, and recommended Joel Greenblatt’s strategy in picking stocks (Magic Formula Investing explained in The Little Book that Beats the Market).
I feel this book is more like a personal finance book, instead of an investment guide. The author devotes a large portion of the book to minimizing expenditure. As for the investment advice, I can summarize it into this sentence: invest in low-fee, no-load index funds or exchanged-traded funds (1 US equity fund and 1 international equity fund or 1 global fund).
The writing style is humourous as the author is good at making jokes. Nonetheless, some tips in this book cannot be applied in Malaysia like tax issues. Besides personal finance issues, the author also included some life advice such as quit smoking. If you really do not have the time to read the whole book, just read the Still not Sure What to Do? appendix. For me, this appendix is the summary of the book.
Is this the only investment guide that I’ll ever need? It is a resounding NO. This book caters to United States citizens, rather than foreign readers. Furthermore, if you like to invest on your own like I do, this book does not offer much valuable information. However, it might prompt us to recognize our limitations and dedicate the bulk of our money to index funds (I do not think we can find low-fee, no-load index funds in Malaysia yet). The author suggested to only use a certain portion of our money for picking our own stocks. I cannot deny that it is a sound suggestion but I still prefer to pick my own stocks.
As a side note, the author mentioned Malaysia in this book on the topic of medical tourism. It is good to see that our country is famous for healthcare service in United States.
- Money does make money. The rich do get richer.
- In the financial market, you get what you pay for it, if you’re careful. If you try to get more, you get burned.
- What a stock is worth depends at any given time on the alternative investments that are then available. It is a question of relative value.
- It is precisely when the market looks worst that the opportunities are best; precisely when things are good again that the opportunities are slimmest and the risks greatest.
- Aiming for higher returns is a good way to get lower returns.
Interested in The Only Investment Guide You’ll Ever Need?
You may get the book from Kinokuniya Malaysia through the link below*.
*Disclosure: The above link is Involve Asia affiliate link. Thus, I may earn a small commission when you purchase the book through this link.