Single best book for basic education on fees, indexing, DIY?

[Tramper Al]

Hi,
I have a sister-in-law who is a bit behind in her retirement planning, but more importantly is being lured by an AUM advisor, that "everybody uses". She is a teacher and the scariest part for me is talk of taking her (only) pension in lump sum form so that he can invest it. He gave her a 62-page form to sign in seven places, so she needs some help. She's smart and could handle this (with a little guidance), but I wonder which (single) book would you recommend for her, for particular emphasis that might bring her around to low fees, indexing, and eventually confidence that it isn't all that hard to DIY. Little Book of Common Sense Investing, John Bogle on Investing, Bogleheads' Guide, or another? I don't want her to be overwhelmed, but am looking for a basic book that would at least touch on the key issues. We don't really have a local shop to browse several of them for content. Thanks.

[Harmanic]

She could go to 403bwise.org and listen to their podcast titled "Learned by Being Burned."

Also "Millionaire Teacher" would be good.

[sycamore]

Mike Piper is a Boglehead who's written books on a number of topics.

"Investing Made Simple: Index Fund Investing and ETF Investing Explained in 100 Pages or Less" might fit the bill for your SIL.

Available at Amazon: https://www.amazon.com/gp/product/B0C2Q ... ype=ebooks

[Mike Scott]

The Bogleheads' Guide to Investing 2nd Edition
by Mel Lindauer (Author), Taylor Larimore (Author), Michael LeBoeuf

If it's all in a 403b, she could put it in a single balanced fund. Of course, the pension might be the better choice.

[arcticpineapplecorp.]

I have a sister-in-law who is a bit behind in her retirement planning, but more importantly is being lured by an AUM advisor, that "everybody uses". She is a teacher and the scariest part for me is talk of taking her (only) pension in lump sum form so that he can invest it. He gave her a 62-page form to sign in seven places, so she needs some help.

1. The response too "everybody uses this AUM advisor" is, "Well, a lot of people used Bernie Madoff too, but that obviously didn't make it a good situation, did it?" They use this AUM advisor because he's poaching all the teachers and no other advisor is similarly poaching so everybody just goes with the same guy everybody knows. Not really the ideal way of actually vetting an advisor is it? This guy might have gotten into the school by being friends with the principal or head of the union rep. That could be the only reason he's there. You just never know.

2. You should ask her if she's thinking of investing her pension as a lump sum why she's thinking of that instead of just collecting a pension? In other words, the reason to invest the pension as a lump sum isn't because an advisor told her to do this (or her coworkers did or they all do this. Again, just because everyone's doing something doesn't make it a good thing). So you'd ask, how did you compare the two choices of pension vs. lump sum? How does she know the latter is a better decision than the former? If she hasn't actually run the numbers then the truth is she doesn't really know which is better. Which means she shouldn't make ANY decision until she first does the work of comparing/contrasting.

3. The little book of commonsense investing is a good one and covers most of the important topics she needs to know. William Bernstein's The Four Pillars of Investing is also good because he wrote that book specifically to say, "These are the four things you need to know in order to be a good investor (d-i-y)." Basically being a stock market historian to better manage investor behavior, understanding how the financial industry wants to separate you from your money (relevant in your SIL's case) impact of fees and so on, understanding math like compounding interest volatility that comes with it and risk and return connection, understanding how passive tends to beat active and why.

4. Before someone uses an advisor they should ask the questions Jason Zweig lays out here: https://jasonzweig.com/the-19-questions ... l-adviser/ If you don't get the answers, or like the answers, you shouldn't use that advisor.

5. The fact that he has a 62 page form to sign in 7 places would cause me to run. She should see if he's a RIA or dually registered (dealer/broker). If he's RIA you can look up his ADV part 2 and any disclosures (complaints) here: https://adviserinfo.sec.gov/ and if he's a broker/dealer (avoid) I think you can look here: https://brokercheck.finra.org/

good luck and let us know how it goes. The sharks are definitely smelling blood in the water.

[steadyosmosis]

(reply removed)

[Mel Lindauer]

I hate to sound like I might be pimping our first book (The Bogleheads' Guide to Investing), but a little background might help you understand my recommendation.

When the Executive Editor from Wiley Publishing called, asking us to write a book, I told him that there were already lots of books written by experts (like our own Dr. Bill Bernstein), but that many of them were written at such a high level (some with lots of math) that they caused a beginner's eyes to glaze over and they'd give up, thinking that investing was rocket science.

I told him that we'd only agree to write the book under one condition, and that was assuming that the reader didn't know anything about investing. So our book tries to help an investing novice understand what they need to know to help them feel confident enough that they can invest wisely and reach their financial goals.

When I read reviews on Amazon.com stating that our book was an easy-to-understand investing book, I feel that we achieved our goal.

[BackToSchoolDad]

https://www.etf.com/docs/IfYouCan.pdf
This and the associated reading list is all she needs.

Bogleheads Guide to Investing is good too.

[like2read]

https://www.bogleheads.org/wiki/Getting_started

[NatureBoy]

Taylor Larimore. "The Bogleheads' Guide to the Three-Fund Portfolio"

It's the first book on this list, can be read in a day, shows how easy it is to DIY, and should rapidly steer anyone away from expensive funds, advisors, or any sort of complex investing strategy.

https://www.bogleheads.org/wiki/Book_re ... nd_reviews

[GerryL]

I hate to sound like I might be pimping our first book (The Bogleheads' Guide to Investing), but a little background might help you understand my recommendation.

When the Executive Editor from Wiley Publishing called, asking us to write a book, I told him that there were already lots of books written by experts (like our own Dr. Bill Bernstein), but that many of them were written at such a high level (some with lots of math) that they caused a beginner's eyes to glaze over and they'd give up, thinking that investing was rocket science.

I told him that we'd only agree to write the book under one condition, and that was assuming that the reader didn't know anything about investing. So our book tries to help an investing novice understand what they need to know to help them feel confident enough that they can invest wisely and reach their financial goals.

When I read reviews on Amazon.com stating that our book was an easy-to-understand investing book, I feel that we achieved our goal.

I recommend the Bogleheads' Guide to Investing to anyone who says they are trying to get started, and I gave it to my nephew when he graduated from college -- just after the 2nd edition came out. I added some highlights and sticky notes and the advice that it does not need to be read front to back, and he could even start with the final chapter that calls out the key learnings from each chapter. We still chat about investing and he has asked me to do a presentation on investing to his young colleagues who are starting retirement planning. He will soon be starting a new job, and I look forward to hearing about the retirement plan his new employer offers.

[delamer]

https://www.etf.com/docs/IfYouCan.pdf
This and the associated reading list is all she needs.

Yes! Even though it’s geared toward young people, it’s short (16 pages), pro-index fund, and warns about the perils of financial “advisors.”

[Fallible]

I hate to sound like I might be pimping our first book (The Bogleheads' Guide to Investing), but a little background might help you understand my recommendation.

When the Executive Editor from Wiley Publishing called, asking us to write a book, I told him that there were already lots of books written by experts (like our own Dr. Bill Bernstein), but that many of them were written at such a high level (some with lots of math) that they caused a beginner's eyes to glaze over and they'd give up, thinking that investing was rocket science.

I told him that we'd only agree to write the book under one condition, and that was assuming that the reader didn't know anything about investing. So our book tries to help an investing novice understand what they need to know to help them feel confident enough that they can invest wisely and reach their financial goals.

When I read reviews on Amazon.com stating that our book was an easy-to-understand investing book, I feel that we achieved our goal.

I recommend the Bogleheads' Guide to Investing to anyone who says they are trying to get started, and I gave it to my nephew when he graduated from college -- just after the 2nd edition came out. I added some highlights and sticky notes and the advice that it does not need to be read front to back, and he could even start with the final chapter that calls out the key learnings from each chapter. We still chat about investing and he has asked me to do a presentation on investing to his young colleagues who are starting retirement planning. He will soon be starting a new job, and I look forward to hearing about the retirement plan his new employer offers.

And I would add that it is a book to read through the first time, after which one can return to as needed to refresh on investing basics, as I have been doing for years now.

[Dottie57]

The biggest thing she needs to know is that anything he invests for her can go up in value, down in value or stay the same.

The following should be understood:

A contact with more than 5 pages needs to be reviewed by a lawyer well versed in financial contracts who can explain intricacies to her. Also sum up ALL fees.

A financial advisor does not know the status of the market next week, next month or years from now.

A pension s a good thing. It will last for life. There is always income coming in whether stock market is up or down.

[Fallible]

Hi,
I have a sister-in-law who is a bit behind in her retirement planning, but more importantly is being lured by an AUM advisor, that "everybody uses". She is a teacher and the scariest part for me is talk of taking her (only) pension in lump sum form so that he can invest it. He gave her a 62-page form to sign in seven places, so she needs some help. ....

I posted earlier on a book she could begin with (The Bogleheads' Guide to Investing) and I
wonder if you can say what the 62-page form requiring seven signatures is called and what investments he is advising and how well she understands them.

[JIT23]

I knew very little about finance and investing a year ago, then I found this forum. Reading the BH Wiki, the forum threads and two books increased my knowledge and confidence significantly. I read John Bogle’s Little Book of Common Sense Investing (10th Anniversary Edition) and William Bernstein’s The Four Pillars of Investing.

[Mel Lindauer]

I knew very little about finance and investing a year ago, then I found this forum. Reading the BH Wiki, the forum threads and two books increased my knowledge and confidence significantly. I read John Bogle’s Little Book of Common Sense Investing (10th Anniversary Edition) and William Bernstein’s The Four Pillars of Investing.

Two great books that will get you on the path to financial success.

[AlwaysLearningMore]

I knew very little about finance and investing a year ago, then I found this forum. Reading the BH Wiki, the forum threads and two books increased my knowledge and confidence significantly. I read John Bogle’s Little Book of Common Sense Investing (10th Anniversary Edition) and William Bernstein’s The Four Pillars of Investing.

I'd be hard-pressed to pick two better books than you suggested.

[Tramper Al]

. . . I wonder if you can say what the 62-page form requiring seven signatures is called and what investments he is advising and how well she understands them.

I wouldn't say she really understands them well at all. The only funds entered onto the form were a couple of U.S. stock index funds from Invesco and Federated. I don't think either has a sales load, though I recall one had an ER near 1.00. With full discretion, I'm not sure it matters too much how it starts out.

The form is a combination of several form, Lincoln Investments. New Account Registration, Financial Advisor With Full Discretion, Fee Schedule - were some of the major parts. I didn't spend to much time pouring over the details once I recognized the theme.

It had been sent to her many times, and I was asked to just take a look at it before she signed.