I highly recommend this book to anyone who doesn't know where they spend their money. I made decent money, but didn't know where it all go. This book begin by teaching me how to set a budget, and control my spending. Remember, to make money with money, you must first learn to save money. This book massively simplify the investment world for me, and it the first of many investment book that I eventually read.
I highly recommend this for people that are starting their investment career, however it doesn't go into too much details on any particular subject.
Down to earth! No pie in the sky schemes, just facts and good advice from someone who's been there and done that. If you prefer a book on how to win the lottery, or get rich quick, this is NOT what you're looking for.
"The Only Investment Guide You'll Ever Need"is a fun-to-read introduction to personal finance. Tobias tells us that, due to the power of compounding, it's important to start saving early. Tobias has a great way to explain compounding to kids. Start with a cookie jar and $1. Tell the kids they can earn 10% daily on their investment in the cookie jar. (Essentially, we squeeze a year's compounding into a day). At the end of the first day, the kid 'earns' 10 cents. At the end of the second day, you pay him/her 11 cents and so on. (to get the next day's value, just multiply the previous day's value by 1.10, using your handheld calculator, or the use cheesy calculator that comes with Windows.) The kid will quickly learn how fast compounding grows money. After 30 days, he'll/she'll have $17.45 in the cookie jar. Tobias points out that Ben Franklin grew up in a time of no income taxes and no social security taxes. Back then, a dollar saved was a dollar earned! Today, for every $1 dollar in earnings, you might pay 33% in federal taxes, 8% in state taxes, and about 7% in Social Security taxes. Added up, that's about 50%, especially if we add in a sales tax. So, for each dollar you spend, you'll need to earn $2. To buy a $20 pizza means you need to earn $40! So, effectively, Tobias says a dollar saved is two dollars earned. The book starts by giving some money-saving tips, such as buying in bulk, insulating your house, replacing incandescent light bulbs with compact fluorescent bulbs, and cutting your own hair (I always knew I should have purchased one of those "Flow-be's" advertised on late night TV many years ago! It combines a vacuum attachment to a barber's clippers. As advertised, it said the vacuum would suck your hair in, the trimmer would cut it to the proper length--Just pass it over your head like a comb, and you're done. And, you've saved fifteen bucks...) Tobias's discussion of bonds is as good as I've seen anywhere without going into teeth-gnashing mathematics. He discusses treasuries (bills, notes, and bonds), junk bonds, zero-coupon bonds, inflation adjusted bonds, municipal bonds, and saving bonds. Tobias suggests skipping corporate bonds and buying treasuries. I especially enjoyed the chapter, "What to Do If You Inherit a Million Dollars; What to Do Otherwise." After discussing a Zen approach to personal finance, Tobias writes: "I believe happiness lies less in how much you have than in which way you're headed. ..." Peter Hupalo, Author of "Becoming An Investor."
If you are expecting to learn everything you need to know about investments from this book, you will probably be disappointed. But this book is funny and entertaining while at the same time it is packed with sound investment advice that can benefit everyone. It was a delightful read. And now my only wish is to have some money to invest! I really enjoyed reading it and learned a lot. It's a great book for a beginner who wants to know more. If that's you, you'll be satisfied after you read it. Some things in life are worth the money. Today I save my money for those things. One of them is peace of mind. I read the book and incorporated its basic message into my daily life. Especially important is calculation of the value of saved money: a dollar (or Russian ruble) saved is one that has escaped taxes and the demands of living. As he puts it, a penny saved is two pennies earned. I remember this message as I walk through stores in Moscow. Now most of our stores in Russia are looking absolutely the same as in Western Europe. Enjoy the book and start enjoying saving! Informative as well as entertaining, this could be the best twelve bucks you'll ever spend. Andrew Tobias makes a good introduction reading about personal finance for everybody.
The author discusses a wide range of investment vehicles aimed at increasing wealth incrementally. He discusses the benefits of zero coupon bonds that are sold cheaply but yield $1000 at maturity. The author lists the 401K plan as a superior investment. Stocks are historically a good tax shelter if they are held for price appreciation and dividend reinvestment. The dividend reinvestment mechanism forces consumers to save money that they otherwise might spend foolishly. Whole life insurance policies require an expert because policies tend to pay low interest rates and there are significant penalties for dropping them. Overall, the work is a good investment for the personal investment portfolio.