investmenting books

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
MP173
Posts: 2073
Joined: Fri Dec 07, 2007 6:03 pm

investmenting books

Post by MP173 » Tue May 19, 2020 4:02 pm

Looking for a book on index funds and general personal finance for my niece and her husband. Both in early 30s and doing well, but are using a high cost personal finance manager....charging 1% annual plus high expense ratio fees and 5.5% load funds.

I know there was a Bogelhead book years ago (which I purchased, read, and lent out) but not sure if there is an updated version.

Thanks,

Ed

bloom2708
Posts: 7742
Joined: Wed Apr 02, 2014 2:08 pm
Location: Fargo, ND

Re: investmenting books

Post by bloom2708 » Tue May 19, 2020 4:16 pm

Dan Solin has a series of books that might fit the bill. I doubt they will read any of them.

The Three Fund Portfolio by Taylor Larimore might be a good start. Well respected Boglehead.

It just isn't easy to change people's minds on topics. They have to want to and be interested.

Maybe point the person who controls the finances here? Lead a horse to water....
"We are here to provoke thoughtfulness, not agree with you." Unknown Boglehead

RussellWilson
Posts: 20
Joined: Fri Oct 18, 2019 10:08 pm

Re: investmenting books

Post by RussellWilson » Tue May 19, 2020 4:17 pm

This seems like a scenario where Jack Bogle's "Little Book of Common Sense Investing" applies pretty well.

Topic Author
MP173
Posts: 2073
Joined: Fri Dec 07, 2007 6:03 pm

Re: investmenting books

Post by MP173 » Tue May 19, 2020 4:28 pm

They are very motivated....reached out to me 3 times the past week.

We had a Duo phone call today and discussed current holdings and I explained the expense ratios, management fees, and the load charges. They are ready to change....today.

She also wants a book to read. Wasnt there a Bogelhead Guide about 10 years ago? Or is there a better, more up to date version?

The 3 portfolio books should work, but she wants a general book to understand how the industry works and pitfalls involved.

She will be visiting here soon.
Ed

WarAdmiral
Posts: 102
Joined: Mon Jan 20, 2020 7:09 pm
Location: Boston

Re: investmenting books

Post by WarAdmiral » Tue May 19, 2020 4:32 pm

RussellWilson wrote:
Tue May 19, 2020 4:17 pm
This seems like a scenario where Jack Bogle's "Little Book of Common Sense Investing" applies pretty well.
+1 This would be a good book for them.

theorist
Posts: 613
Joined: Sat Sep 28, 2019 11:39 am

Re: investmenting books

Post by theorist » Tue May 19, 2020 4:37 pm

MP173 wrote:
Tue May 19, 2020 4:28 pm
They are very motivated....reached out to me 3 times the past week.

We had a Duo phone call today and discussed current holdings and I explained the expense ratios, management fees, and the load charges. They are ready to change....today.

She also wants a book to read. Wasnt there a Bogelhead Guide about 10 years ago? Or is there a better, more up to date version?

The 3 portfolio books should work, but she wants a general book to understand how the industry works and pitfalls involved.

She will be visiting here soon.
Ed
The recommendations so far are good. I’d also highly recommend

Charles Ellis, “The index revolution” (nice and short, very convincing)

Burton Malkiel, “A random walk down Wall Street” (not short but a true classic, and imparts some real understanding — also very readable)

cherijoh
Posts: 6579
Joined: Tue Feb 20, 2007 4:49 pm
Location: Charlotte NC

Re: investmenting books

Post by cherijoh » Tue May 19, 2020 4:42 pm

MP173 wrote:
Tue May 19, 2020 4:02 pm
Looking for a book on index funds and general personal finance for my niece and her husband. Both in early 30s and doing well, but are using a high cost personal finance manager....charging 1% annual plus high expense ratio fees and 5.5% load funds.

I know there was a Bogelhead book years ago (which I purchased, read, and lent out) but not sure if there is an updated version.

Thanks,

Ed
You m iht wank to check out the Wiki on this topic.

gr7070
Posts: 1023
Joined: Fri Oct 28, 2011 10:39 am

Re: investmenting books

Post by gr7070 » Tue May 19, 2020 4:47 pm

I commonly recommend Mike Piper's 100 page book, Investing Made Simple, to any new investor. It's especially beneficial to those who aren't that interested and less likely to spend a great deal of time reading.

I see your niece is more motivated, but it's still a very good quick read. It's also priced well.

He's also somewhat active here.

User avatar
Ben Mathew
Posts: 949
Joined: Tue Mar 13, 2018 11:41 am
Location: Seattle
Contact:

Re: investmenting books

Post by Ben Mathew » Tue May 19, 2020 4:52 pm

That Thing Rich People Do, Kaye Thomas

Not a great title, but a great book. It's a short, sensible primer for beginners that covers the basics of investing quickly and correctly.

Fallible
Posts: 7356
Joined: Fri Nov 27, 2009 4:44 pm
Contact:

Re: investmenting books

Post by Fallible » Tue May 19, 2020 4:54 pm

MP173 wrote:
Tue May 19, 2020 4:02 pm
Looking for a book on index funds and general personal finance for my niece and her husband. Both in early 30s and doing well, but are using a high cost personal finance manager....charging 1% annual plus high expense ratio fees and 5.5% load funds.
I know there was a Bogelhead book years ago (which I purchased, read, and lent out) but not sure if there is an updated version.ThanksEd
Do they realize the fees are high and are they ready to make a change? If not, would they read a book and be open to its teachings? The BH wiki has a reading list here:

https://www.bogleheads.org/wiki/Books:_ ... nd_reviews
John Bogle on his often bumpy road to low-cost indexing: "When a door closes, if you look long enough and hard enough, if you're strong enough, you'll find a window that opens."

User avatar
Taylor Larimore
Advisory Board
Posts: 29416
Joined: Tue Feb 27, 2007 8:09 pm
Location: Miami FL

The Bogleheads' Guide to the Three-Fund Portfolio

Post by Taylor Larimore » Tue May 19, 2020 4:55 pm

MP173 wrote:
Tue May 19, 2020 4:02 pm
Looking for a book on index funds and general personal finance for my niece and her husband. Both in early 30s and doing well, but are using a high cost personal finance manager....charging 1% annual plus high expense ratio fees and 5.5% load funds.

I know there was a Bogelheads' book years ago (which I purchased, read, and lent out) but not sure if there is an updated version.

Thanks,

Ed
Ed:

I believe that your niece and her husband will benefit from reading the most recent "Bogleheads' Guide" book: The Bogleheads' Guide to the Three-Fund Portfolio.

If they are disappointed in the book I will refund to you the book's purchase price.

Best wishes
Taylor
Jack Bogle's Words of Wisdom: "The Three-Fund Portfolio will help you to develop a sound asset allocation strategy, make smart investment selections, and guide the implementation of your plan.
"Simplicity is the master key to financial success." -- Jack Bogle

Dominic
Posts: 372
Joined: Sat Jul 02, 2016 11:36 am

Re: investmenting books

Post by Dominic » Tue May 19, 2020 5:35 pm

Bill Bernstein's "If You Can" is a free pamphlet that covers the essentials for young investors. It's what I suggest.

whereskyle
Posts: 737
Joined: Wed Jan 29, 2020 10:29 am

Re: investmenting books

Post by whereskyle » Tue May 19, 2020 5:45 pm

MP173 wrote:
Tue May 19, 2020 4:02 pm
Looking for a book on index funds and general personal finance for my niece and her husband. Both in early 30s and doing well, but are using a high cost personal finance manager....charging 1% annual plus high expense ratio fees and 5.5% load funds.

I know there was a Bogelhead book years ago (which I purchased, read, and lent out) but not sure if there is an updated version.

Thanks,

Ed
I think the Little Book of Common Sense Investing by John C. Bogle gets the job done. It did for me.
"I am better off than he is – for he knows nothing, and thinks that he knows. I neither know nor think that I know." - Socrates. "Nobody knows nothing." - Jack Bogle

isubrama
Posts: 8
Joined: Sun Apr 12, 2020 12:27 pm

Re: investmenting books

Post by isubrama » Tue May 19, 2020 5:56 pm


User avatar
arcticpineapplecorp.
Posts: 5137
Joined: Tue Mar 06, 2012 9:22 pm

Re: investmenting books

Post by arcticpineapplecorp. » Tue May 19, 2020 9:23 pm

MP173 wrote:
Tue May 19, 2020 4:02 pm
Looking for a book on index funds and general personal finance for my niece and her husband. Both in early 30s and doing well, but are using a high cost personal finance manager....charging 1% annual plus high expense ratio fees and 5.5% load funds.

I know there was a Bogelhead book years ago (which I purchased, read, and lent out) but not sure if there is an updated version.

Thanks,

Ed
As for the 1% fee show them this:
Image

source: http://web.archive.org/web/201611100649 ... f-returns/

if they don't understand that, a book won't help. That chart shows paying a 1% fee will cost them 25% of their terminal wealth over 30 years (and 33% of their terminal wealth over 40 years). That's an awful lot to hand over to their advisor. Is s/he worth a quarter to a third of their entire portfolio over decades? Where are the customer's yachts?

Regarding the 5.5% load...I assume it's probably a 5.75% load. Why? That's pretty standard, that's why. Do they even know what a load is? Tell them it's a commission. They're paying a commission to a salesperson to sell them a mutual fund. Ask them if they need to be sold a mutual fund, or if they can just buy one (presumably like you do) without having to pay a load?

Then give them the scenarios:
You invest $10,000 no load fund. entire $10,000 is invested.
You invest $10,000 with a 5.5% load. 5.5% of $10,000 is $550. Because you pay a $550 commission, you only get to invest what's left: $9450.

Ask them if they want to invest $10,000 or $9450 (but are required to come up with $10,000 either way)?

Show them what the difference is over 40 years (assume an 8% CAGR):

For $10,000 invested (no load)
=FV(.08,40,0,-10000)
is $217,245.21

For $9450 invested (paid the $550 load from $10,000 and only $9450 left to invest):
=FV(.08,40,0,-9450)
is $205,296.73

Now for the fun part. What is the true difference that one time $550 initial load cost them over 40 years?

$217,245.21 - $205,296.73 = $11,948.49

Two ways of thinking about it:
1. pretty expensive load, no? Not $550, but really cost them $11,948.49.
2. They could have had $11,948.49 more had they not paid that 5.5% ($550) load at all.

of course the standard argument (and the one the "advisor" will likely use to keep them in these funds) is to question whether the no-load fund will do the same, better, or worse than the loaded fund. They will make you believe you get what you pay for as in, you get something extra. But you can see the reality as Jack Bogle taught us is with investing, you get to keep what you don't pay for.

If these examples don't elucidate, nothing will I'm afraid.
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

Topic Author
MP173
Posts: 2073
Joined: Fri Dec 07, 2007 6:03 pm

Re: investmenting books

Post by MP173 » Wed May 20, 2020 7:06 am

Wow...thanks for all of the great suggestions.

They are motivated. She is one of the most focused people I know and she "gets it."

Thanks for the example of what 1% AUM truly means over a 30 years period. That will open her eyes even wider.

Taylor, thanks for the offer on "Bogelheads Guide...." She will not be disappointed in it. I havent read it, but have benefitted from your advise over the years.

Thanks,

Ed

ZumZabo
Posts: 153
Joined: Mon Dec 01, 2014 1:33 pm
Location: I'm in a secure location

Re: investmenting books

Post by ZumZabo » Wed May 20, 2020 8:10 am

“Winning the Loser’s Game” by Charles Ellis is a really great book as an intro to the benefits of low cost index investing. His resume gives him huge credibility and I don’t think he has any agenda other than helping investors become better investors. A true gentleman. I own it and haven’t read it in a long time since I have been sold on indexing for many years. Time to get it out and read it again.
What made me think I could start clean slated? The hardest to learn was the least complicated: Emily Saliers / And if I claim to be a wise man, it surely means that I don't know: Kerry Livgren

bene1
Posts: 113
Joined: Mon Jul 13, 2015 12:44 pm

Re: investmenting books

Post by bene1 » Wed May 20, 2020 6:25 pm

gr7070 wrote:
Tue May 19, 2020 4:47 pm
I commonly recommend Mike Piper's 100 page book, Investing Made Simple, to any new investor.
+1

Vanguard Fan 1367
Posts: 1574
Joined: Wed Feb 08, 2017 3:09 pm

Re: investmenting books

Post by Vanguard Fan 1367 » Thu May 21, 2020 2:08 am

I was motivated to read Bogle’s books and bought the Kindle book “The John Bogle Reader”. It changed my life.
Upton Sinclair: "It is difficult to get a man to understand something when his salary depends on his not understanding it."

User avatar
CABob
Posts: 4868
Joined: Sun Feb 25, 2007 8:55 pm
Location: Southern California

Re: investmenting books

Post by CABob » Thu May 21, 2020 1:49 pm

You've received a number of good suggestions in the responses above. Perhaps my favorite for someone such as your niece is Personal Finance for Dummies by Eric Tyson. You might also look at some of Tyson's other books.
Bob

Quaestner
Posts: 236
Joined: Tue Jul 18, 2017 6:39 pm

Re: investmenting books

Post by Quaestner » Thu May 21, 2020 1:59 pm

William Bernstein's "Investor's Manifesto: Preparing for Prosperity, Armeggedon, and Everything in Between" was very influential to me.

User avatar
abuss368
Posts: 19674
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: investmenting books

Post by abuss368 » Thu May 21, 2020 8:36 pm

MP173 wrote:
Tue May 19, 2020 4:02 pm
Looking for a book on index funds and general personal finance for my niece and her husband. Both in early 30s and doing well, but are using a high cost personal finance manager....charging 1% annual plus high expense ratio fees and 5.5% load funds.

I know there was a Bogelhead book years ago (which I purchased, read, and lent out) but not sure if there is an updated version.

Thanks,

Ed
Anything from John Bogle! The Bogleheads Guides (3 of them) are excellent choices. John Brennan, former CEO of Vanguard "Straight Talk on Investing" is excellent.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

S_Track
Posts: 339
Joined: Sat Feb 18, 2017 12:33 pm

Re: investmenting books

Post by S_Track » Thu May 21, 2020 9:33 pm

bene1 wrote:
Wed May 20, 2020 6:25 pm
gr7070 wrote:
Tue May 19, 2020 4:47 pm
I commonly recommend Mike Piper's 100 page book, Investing Made Simple, to any new investor.
+1
+ 2 Mike Piper's Investing Made Simple, It's a quick read and if they learn from examples that is the book for them. Then move to Bill Bernstein's "If You Can" as others suggested.

https://www.amazon.com/gp/product/B078R ... bl_vppi_i5

IowaFarmWife
Posts: 198
Joined: Thu Nov 02, 2017 9:42 pm

Re: investmenting books

Post by IowaFarmWife » Thu May 21, 2020 9:45 pm

I am currently reading "The Millionaire Teacher." I am enjoying it and have been learning a lot about investing and personal finance. https://www.amazon.com/Millionaire-Teac ... 0470830069
“The quickest way to double your money is to fold it in half and put it in your back pocket.” —Will Rogers

User avatar
JupiterJones
Posts: 2846
Joined: Tue Aug 24, 2010 3:25 pm
Location: Nashville, TN

Re: investmenting books

Post by JupiterJones » Fri May 22, 2020 9:50 am

CABob wrote:
Thu May 21, 2020 1:49 pm
You've received a number of good suggestions in the responses above. Perhaps my favorite for someone such as your niece is Personal Finance for Dummies by Eric Tyson. You might also look at some of Tyson's other books.
Agreed. Of the ones mentioned, you can't go wrong with:
  • Any of the Tyson "Dummies" books
  • Dan Solin's "The Smartest Investment Book You'll Ever Read"
  • Any Mike Piper
The books from Jack Bogle, the Bogleheads, William Bernstein, etc., are largely quite good too (not bowled over by the b-head 3-fund book, TBH), but they're not the sort of things I'd necessarily start someone out with.

The above-bulleted books, on the other hand, are clear, breezy, concise, and full of solid advice. The perfect "gateway drugs". :beer
Stay on target...

User avatar
Abe
Posts: 2102
Joined: Fri Sep 18, 2009 5:24 pm
Location: Earth in the Milky Way Galaxy

Re: investmenting books

Post by Abe » Fri May 22, 2020 1:14 pm

There are a lot of investing books. The Bogleheads Guide to Investing and The Simple Path to Wealth by J L Collins are two good ones to start on. If they are not interested enough to read a couple of books, they probably won't get very far investing. You've got to be willing to take the time to learn a few things. The actual learning how to invest is not that hard, but you've got to have the willingness, the perseverance and the determination to do it. That's the hard part for some people. Most people want to "get rich quick", but investing is a long term process.

ETA: Two other books that come to mind are "If You Can" by William Bernstein which you can read free here: https://www.etf.com/docs/IfYouCan.pdf I would recommend reading If You Can first. It's short and free.
and "Investing Made Simple" by Mike Piper
Last edited by Abe on Fri May 22, 2020 2:01 pm, edited 1 time in total.
Slow and steady wins the race.

mc2
Posts: 163
Joined: Wed Jan 13, 2016 10:27 am

Re: investmenting books

Post by mc2 » Fri May 22, 2020 1:44 pm

CABob wrote:
Thu May 21, 2020 1:49 pm
You've received a number of good suggestions in the responses above. Perhaps my favorite for someone such as your niece is Personal Finance for Dummies by Eric Tyson. You might also look at some of Tyson's other books.
Investing-ok.
Investments-got it.
Investmenting?...Investisizing?...Financiafy?...Budgetization?...is G Dub here?...really, we don't need more of these terms... :wink:

I second this recommendation. The book is simply written and is very approachable to almost anyone. It has chapters covering many financial considerations for people, but I believe the author's insight into investing fundamentals and insurance products is the best thing about it.

Emphasize the "for dummies" really doesn't mean it's basic-it's just well written.

I think if anyone follows even 80% of the advice, they will build a very solid investment plan and learn to not get preyed upon by the insurance/financial machine.

Sadly, I had plugged into a few insurance sales pitches, only to find out how costly they were after reading this book. My choices didn't kill me, but I probably could have saved somewhere between $5-10k had I read the $19 book.

Best to you and I think it's great that you are thinking of them.

Lastly-encourage them to hit up the BH Forum!!! :beer

User avatar
JupiterJones
Posts: 2846
Joined: Tue Aug 24, 2010 3:25 pm
Location: Nashville, TN

Re: investmenting books

Post by JupiterJones » Tue May 26, 2020 1:52 pm

mc2 wrote:
Fri May 22, 2020 1:44 pm
Investing-ok.
Investments-got it.
Investmenting?...
I kinda like it!

Reminds me of this website where someone trained an AI on some dictionaries and had it come up with new words. They sound like they should exist, but they don't.

https://www.thisworddoesnotexist.com/

A few I just pulled from it just now:

consecutivity
lamehead
impartitute
geoenergistics
stovetrotter
Stay on target...

mc2
Posts: 163
Joined: Wed Jan 13, 2016 10:27 am

Re: investmenting books

Post by mc2 » Wed May 27, 2020 2:23 pm

JupiterJones wrote:
Tue May 26, 2020 1:52 pm
mc2 wrote:
Fri May 22, 2020 1:44 pm
Investing-ok.
Investments-got it.
Investmenting?...
I kinda like it!

Reminds me of this website where someone trained an AI on some dictionaries and had it come up with new words. They sound like they should exist, but they don't.

https://www.thisworddoesnotexist.com/

A few I just pulled from it just now:

consecutivity
lamehead
impartitute
geoenergistics
stovetrotter
Love it!
I have a sister in law who is very much part of the grammar police. She (and I) got a laugh when I told her I met with a young professional girl who told me she chose computer/network security because it had "good jobability."

Post Reply