Common Sense Investing

From Bogleheads
Jump to: navigation, search
1466204516-front 600x818.jpg
Title: Common Sense Investing: Ten Simple Rules to Finance Your Dreams
Author: Rick Van Ness
Publisher: GrowthConnection, LLC
Publication date: September 2011
Pages: 108 pp (Trade paperback)
ISBN: 978-0985800413

Common Sense Investing (full title: Common Sense Investing: Ten Simple Rules to Finance Your Dreams) is an introduction to the Bogleheads® investment philosophy. Although officially there is no such doctrine, this book describes the guiding principles that are espoused by John C. Bogle and the consensus of the vast majority of his followers who endearingly call themselves Bogleheads.

About the author

Rick Van Ness is a very successful private investor who has been a student of financial planning and investing for over 30 years. He was trained as an electronics engineer at Cornell University and practiced engineering for many years at Hewlett Packard Company. Rick also started three companies and coaches entrepreneurs in the Puget Sound area.

He also earned an MBA in Finance from New York University. His background in engineering and business provides him with the excellent basis for understanding and teaching investments and financial planning.

Table of contents

Preface (a true story)
Introduction
Rule #1: Develop a workable plan
Rule #2: Invest early and often
Rule #3: Never bear too much or too little risk
Rule #4: Diversify
Rule #5: Never try to time the market
Rule #6: Use index funds when possible
Rule #7: Keep costs low
Rule #8: Minimize taxes
Rule #9: Keep it simple
Rule #10: Stay the course
Appendix A: Simple rules vs human nature
Appendix B: Become a savvy buyer
Appendix C: Example startup portfolios
Appendix D: Dollar cost averaging
Appendix E: Rebalancing
Appendix F: Low-cost mutual fund providers
Workspace: Start your plan

Book summary

"Some of our dreams need a little money. This list is where we begin [figure listing retirement, house, car, vacations, college etc]. We need to have some idea of how much we need to save and how we will save it. There may be part of you rebelling already. Relax. Of course you don’t know the future! But it will serve you to imagine one scenario. The enemy of a good plan is the search for a perfect plan.…. Make assumptions, and then change them when you get better ideas or better information. Our goal is to enable these possibilities."
-- Common Sense Investing, chapter 1

The ten rules were originally posted as short videos at Video:Bogleheads® investment philosophy. They are very popular because they are short, interesting, rich with graphics and simple to understand. The author went on to put the content in both paperback and ebook formats for the many that don't watch online videos, or that simply wanted to ponder the key concepts at a more leisurely pace.

The goal of the book is to encourage readers to create a written, first draft, one-page investment plan that they can edit as they learn more. Articulated goals are more likely to be achieved, and an investment strategy that is written is easier to stick to when the going gets tough.

Reviews

Praise from professional money managers

“Hide this book in a safe place because grossly overpaid investment advisors are burning every copy they can find.”
Rick Ferri, CFA, President, Portfolio Solutions LLC Author: All About Asset Allocation, All About Index Funds, and others.

“Rick has produced a masterful financial guide for beginning investors and old hands alike. If you want to get started investing the right way, this book provides the clarity and backbone to achieve your financial destiny.”
Bill Schultheis, Financial Adviser Soundmark Wealth Management, LLC Author: The New Coffeehouse Investor

“Rick has provided a great service. In terms that the novice investor can understand, he provides ten simple rules that provide the prescription for investment success. In fact, if you follow his rules you are virtually guaranteed to outperform the majority of investors, both individual and professionals alike.”
Larry Swedroe, Principal and Director of Research Buckingham Family of Financial Services Author of eleven books on investing

Praise from academics

“Here are 10 simple, easy to follow, and proven investing rules. Investing an hour reading this short book will make you a better investor.”
Burton G. Malkiel, Princeton University, Professor of Economics Author: A Random Walk Down Wall Street

Praise from authors about investing

“Common Sense Investing captures the core elements of the Bogleheads® investment philosophy in terms any investor can easily understand and implement. Read it and reap!”
Mel Lindauer, Forbes columnist Co-author: The Bogleheads’ Guide to Investing and The Bogleheads’ Guide to Retirement Planning

"Rick Van Ness' Common Sense Investing offers readers some crisp, simple, and irrefutably great investment advice. In about an hour, you can learn ten simple rules that will give you all you need to pull ahead of the herd and leave 99 percent of so called investors in your dust."
—Alan Roth, CBS MoneyWatch

"I have seen no better summary of “Boglehead Investing,” which is essentially low-cost, widely-diversified, buy and hold fixed asset allocation investing. If you can’t come up with a single hour to read this book, you’re probably hopeless as far as a do-it-yourself investor."
—EmergDoc, The White Coat Investor blog

Reader reviews at Amazon.com

Reader reviews posted at Amazon.com

See also

Affiliate links

Any purchases made at Amazon.com will result in a small referral fee for us. It does not cost you anything extra.