That's where the final book in my Thrift Week series comes in. The Only Investment Guide You'll Ever Need, by Andrew Tobias, is, in the author's own words, an "immodestly titled book" (he blames the publisher for that) with a perfectly modest goal: to steer you toward the simplest, surest path to financial security. The steps on this path, as Tobias sees them, are:
- Cutting your expenses as much as possible, so that you can live comfortably on less income.
- Setting aside a nice big chunk of your money in safe, liquid investments to see you through any emergency.
- Putting the rest of your money—your long-term investments—primarily into stock-market index funds, which will yield the best return because they keep expenses low. (Tobias recommends splitting these between U.S. and foreign investments to protect yourself against big swings in the U.S. market.)
- Sticking with this plan regardless of what the market is doing. Over the long term, the plan will work regardless of short-term bumps and dips, and swerving from it in response to a single piece of good news or bad news is a good way to derail your long-term savings.
Second, Tobias's investment guide, like the Car Talk book, focuses on the big picture. As Tobias explains it,
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 brings me to the third big advantage of this book: Tobias's writing style. While it may not truly be the only investment guide you'll ever need, it is almost certainly the only one you'll ever read just for the fun of it. The biggest problem with most investment guides isn't that their advice is bad (although sometimes it is); it's that the material is so incredibly dry that you'll probably have too much work just slogging through it to figure out whether the advice is actually useful. This book, by contrast, brings its points to life with loads of humorous anecdotes, like a trip to the racetrack that involved an eventful bet on a long shot named Willow (the phrase "Come onnnnnn, WILLow!" appears as a catchphrase throughout the book for referring to any sort of long-shot investment), or an analysis of a celebrity life insurance ad featuring Gavin McLeod, or "the story of The Greatest Moment of My Life" in the Decision Analysis class at Harvard Business School. (I won't spoil the story for you by repeating it here, but a footnote at the end of it remarks, "Herewith a list of all my other triumphs at Harvard Business School: I graduated.") Because the stories hold your attention, the useful advice actually has a chance to sink in, instead of vanishing into the ether the minute you close the book.
In summary, I'd recommend this book for two groups of people: (a) anyone who has money to invest, and (b) anyone who wants to figure out how to get more money to invest. In other words, pretty much everyone.
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