This book is a compilation of investment advice from some of the most well known finance gurus in America. As you read this book you feel as though you are sitting right in front of these people and are having a one-on-one conversation with them. Some of the authors provide very rich insight while in contrast some of them use their input to simply promote their product or company. This is an excellent book for someone who would consider themselves a “just started” investor, an intermediate investor, or even an investor who is looking for a fun, quick, interesting read.
Some of the content was a little redundant. Diversification, being greedy when others are fearful and visa versa, and the idea that timing the market is a fool’s game were all common ideas. Nevertheless, these are very important informational components of building a strong foundation of investment knowledge.
Some of my favorite quotes from the book:
“Despite what a professional planner might advise, you can’t save and consume.” Richard Bernstein P.19
All too often in our society we are trying to out buy our neighbors in an attempt to impress everyone. This is a road to failure. One of the keys to building wealth is putting money away so that it can grow and unfortunately that means not spending that money on the usual useless things. This quote embodies the idea of short-term sacrifice now in order to be benefitted later. This is the heart of building wealth.
“The more certain the crowd is, the more certain it is to be wrong.” Doug Kass P.92
This one really got the wheels turning in my mind. I started to think about how just before the Great Depression people thought that poverty was soon to be annihilated and something of the past. I also started to think of all those people in the banking industry that come on the news just before the Great Recession and said how everything was fine. It’s important to have your own view, something that you derive, with the information that you’ve collected. It’s dangerously easy to blindly follow the crowd and this can get you hurt. One of the keys to investing is being able to see where the crowd is going and how its direction can be an opportunity. This requires you to separate yourself from the crowd and think rationally, which sounds easy, but in reality is difficult to do.
“My father taught me the importance of saving early and saving often, which translates into investing early and investing often.” Joe Lee P.106
I liked this quote for a couple reasons. The first reason is that people who are great at building wealth are those who are intentional about systematically putting money towards their investments on a regular basis. The second reason is that it differentiates savings and investing. Yes, there is a difference. Savings is what you have in your checking or savings account at your bank earning next to nothing but that you can access quickly for emergencies or buying opportunities. An investment on the other hand is something that provides a return: a crucial aspect of developing wealth.
Overall the book is worth the read and Claman saves the best for last. One of the best pieces of advice is at the very end so at least read the last few pages. Enjoy! 🙂