Category: 2 – BUY it! (All Categories are 1 – Read ASAP!, 2 – BUY it!, 3 – SHELF it, 4 – SOMEDAY it)
Comments: The Only Investment Guide You’ll Ever Need was a recommendation on Seth’s blog. I picked it up at a time when I needed a bit of a refresh on all things investments since I’d taken all money off indexes to pay for graduate school. It was nice to “get back” with this book and, as with all Seth recommendations, this didn’t disappoint. It definitely lives up to its name as the “only” investment guide you’ll ever need. It is witty, smart and worth following.
If this topic interests you, do check out a learnographic I co-created here.
Top 3 Learnings:
1. A penny saved is a lot more valuable than a penny earned. The quote from Benjamin Franklin was from a time when there were no taxes. Now that we live with taxes, it actually takes a lot more than a penny earned to save a penny. So, spend less than you earn, save and watch it grow. This is a lesson that has stuck with me since the book.
2. When there are too many borrowers, governments raise interest rates. This means bond prices fall. When there are less borrowers, bond prices go up. High interest rates tend to affect stocks since they discourage people from investing in risky stocks. They also affect business’ cost of borrowing.
3. Keep short term money somewhere safe and convenient. Then, invest long term money in stock indexes where you must buy low, buy low, buy low. This is opposite what everyone else does. A simple vanguard index will outperform everything else in the long run.
I would still recommend reading 2-3 investment guides before you zero in on your investing strategy. That is not because the advice in the only investment guide is any different. However, if you haven’t been exposed to this world before, it is reassuring to see the same principles at work everywhere.
Book notes here.