Category: 2 – BUY it! (All Categories are 1 – Read ASAP!, 2 – BUY it!, 3 – SHELF it, 4 – SOMEDAY it)
Comments: Really good book. This book was recommended to me by one of my favorite authors William J Bernstein when I asked him for Singapore specific investment advice.
A must-read for folks living outside the US looking for solid money and investment advice.
Top 3 Learnings:
1. Live like a millionaire. Millionaires wear cheap watches, buy second hand cars, and live in the suburbs. Real millionaires live frugally and invest wisely.
2. Compound interest is the most important mathematical concept you need to know. The earlier you start investing, the better it is for you as compound interest will take over. Invest in simple plain vanilla index funds (same as Bernstein’s advice.. the value add here is clear steps for folks living in Canada, UK, Australia, and Singapore) and remember that financial service firms are out to eat into your money. Actively managed mutual funds are a no-no.
3. Every generation is gripped by irrational financial madness at some points (the tech bubble being an example). When you see a market behaving irrationally, be fearful. The relationship between the value of a stock and it’s earning is similar to a dog on a leash with it’s master. One can be far ahead of the other for only a short while.
Click here for book notes from the book