The Only Investment Guide You'll Need - Make $1000 Without Lifting a Finger (Part 1)

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Want to read this with me? Pick it up here: https://amzn.to/2DmrBaK

Welcome to my next book review series. This time we are looking at The Only Investment Guide You'll Need by Andrew Tobias. That is a pretty big claim to make, considering investments can be complicated and hard to grasp but we will work through it and see how it goes!

Part One: Minimal Risk

We open with some interesting statistics, basically, investing advice needs to change as the market changes. If you put $1000 in savings in 1981, in 2 years you would make $336 in interest, in 2016 however, you would only make $20. So your savings is actually losing you money vs inflation.

Part one opens with some of the old get rich quick schemes, some of these I find pretty funny. Back in the 80's there were people touting investing in Mexican banks at 12% interest vs the 5.5% (I wish!) you would get in savings in the states. However, what they did not mention was the highly volatile nature of the Peso, most people lost over 50% on their capital in a few weeks. There is this really interesting idea that learning more MAY NOT make you a better investor! It makes a lot of sense, most money managers actually perform worse than the market average. Monkeys given a handful of darts perform on average the same as a professional money manager. Consider that next time you are paying someone 1-3% of your portfolio every year.

One thing I want to point out about this book, for better or worse, is that Andrew loves bulleted lists. So my review is also probably going to look and feel quite fragmented - that said, I will cram as much useful information into these write ups as I can.

Unless you know something you shouldn't do not invest in commodities (98% of people, besides the managers, lose on them).

This next section is pretty great, basically a common complaint around savings is that people do not have enough money to save. Awesome, well you could continue to say that or you could do something about it. His first "task" is finding a way to save an extra $1,000 a year.  He provides a whole list of ideas, I will list a few of my favorites:

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• Buy wine by the case and save 10% (buying in bulk to save on things you NEED).
• Fly now, pay now - pay off credit cards as soon as you use them.
• Stay Cheap - Shop around for hotels, some sites allow you to bid saving up to 30%.
• Avoid the mini bar - hit a grocery store before you go out.
• Do not finance cars - buy one you can afford.
• Consider gas mileage - save on fuel.
• Buy no car - if you live in a place with good public transit options, save on the car, insurance and gas.
• Shop around on insurance - you will be surprised what you can save.
• Use a deep discount broker - Money managers tend to be over paid, don't pay a ton to trade stocks.
• Consolidate student loans - If it saves you on points, definitely consider it.
• Prepare your own taxes - With online services, it is quite easy.
• Use the library - I promise, unless you have been in the last 10 years, you have no idea how much the offer.
• Waste Less - Make sure you are using almost all of those groceries you are buying.
• Keep the freezer full - Uses less energy, and you can save when buying in bulk.
• Read your medical bills - They normally contain mistakes that you should not pay for.
• Do the math - Find areas of frivolous spending, just making coffee at home every day can save huge dollars.
• Ask for a discount - You never know.

What I love about this section is just that it is not about becoming rich. It is simple ways to save a few bucks here and there that can seriously add up to large amounts over the course of a year. Also, considering you are paying taxes on your income, not spending some of it and getting taxed twice can be a huge boon.  Take that money and put it in an IRA for example (what is an IRA? Check here!) to save on taxes down the road.

Conclusion: I like the approach Andrew takes in this book. It is accessible and not everyone can wrangle in their budget and start saving. At this point I have read a few books on this topic and hoped this one would have some new information, and he came through. Until next time!

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