The Lazy Investor - Derek Foster

The Lazy Investor
Derek Foster
Foster, Underhill Financial Press
Copyright: 2007
9780973696011

The blurb from the Stop Working Website:

The Lazy Investor: Start with $50 and no Investment Knowledge was written for beginner investors. The book details a step-by-step plan for you to gradually accumulate wealth over time without falling victim to the high fees many beginner investors pay. A strategy simple enough for anyone to understand and one that runs on “autopilot” once it’s set up. Derek’s children are currently using this strategy to accumulate wealth.

This little book is written for Canadians who are interested in getting started with investing. It's designed for people who are starting with no knowlege of the subject. Which, I have to say fits me exactly. The book is short (I read it through in one evening), and simple. It's also written in a way that made me feel that this is something I can do.

The idea of being able to start investing without needing a lot of money is an intriguing one. The claim on the cover is that you can start with as little as fifty dollars CDN. Inside it turns out to be a bit more, but not by much. The initial purchase as described still comes out to less than a hundred dollars.

The author gives suggestions for some good companies to start with (including their histories) and also goes over the process of getting started and buying your first stock certificates step by step. I haven't gone out and tried it yet, but the process looks like it makes sense and the book is clearly and simply written.

At the back of the book is included a list of further books on the subject that your could read if you want to learn more.

The one thing that makes me a bit hesitant is that the book was written before the great crash of the last couple of years and quite a few of the companies the author looks at are banks. On the other had, they're all Canadian ones and my understanding is that we made it out a lot better than some of the other countries.

The Millionaire Next Door - Thomas J. Stanley and William D. Danko

The Millionaire Next Door
Thomas J. Stanley, Ph.D. and William D. Danko, Ph.D.
Pocket Books
Copyright Date: 1996
978-0547273426

According to the cover of The Millionaire Next Door:

The incredible national bestseller that is changing people''s lives -- and increasing their net worth!

CAN YOU SPOT THE MILLIONAIRE NEXT DOOR?

Who are the rich in this country? What do they do? Where do they shop? What do they drive? How do they invest? Where did their ancestors come from? How did they get rich? Can I ever become one of them?

Get the answers in The Millionaire Next Door, the never-before-told story about wealth in America. You''ll be surprised at what you find out....

This was highly recommended to my by several people I talked with, so, always being curious about ways to improve my financial standing, I decided to take a look.

Frankly, I found the book a bit disappointing. First of all, and I should have realized it from the start, the book is entirely focused around the United States. I'm Canadian, so a lot of what the authors are mentioning doesn't apply quite the same. Second, the book only has one small line for any strategy other than the one the authors are following in The Millionaire Next Door.

The theme of this book is to live below your means. It's more or less obvious, really that to save money, that's what you have to do. I found it got a bit repetitive though after the first couple of chapters.

I also would have liked more than a couple of lines mentioning the "Pay Yourself First" strategy, which is the one I grew up reading about in David Chilton's The Wealthy Barber and David Bach's Automatic Millionaire series.

There were some interesting points to use as food for thought though, such as some snippets about different investment/savings strategies and plenty of statistics (none of which left me feeling overly hopeful).

Also, being more than ten years old, some of the numbers in The Millionaire Next Door left me wondering. Repeatedly the authors quote prices for houses that just seem outrageously low, as being quite extravagant. Maybe it's just a regional thing though.

Overall, this was quite a quick read, but also rather depressing. I prefer the other two books I've mentioned, The Automatic Millionaire by David Bach and The Wealthy Barber by David Chilton, even though the numbers in the second are even more outdated than in The Millionaire Next Door, as both are quick, informative and also, rather fun at times.

I will just note here that I have no background in finance and these are just my opinions on the books I've read.


Other personal finance themed books I've reviewed:
The Automatic Millionaire Homeowner - David Bach

The Automatic Millionaire Homeowner - David Bach

The Automatic Homeowner Millionaire
David Bach
Doubleday Canada
Copyright: 2006
9780385661744

From the back of the book:

Imagine this. You buy a home, live in it, then buy another. You build your wealth through real estate - and then retire rich. It may sound too good to be true. But it's not. It has happened, it's happening now, and it will continue to happen for millions of people over the next few decades. The question is, will it happen for you?

If you want the answer to be "yes", then stop what you are doing and open this book. Read a few pages. Bach's simple strategies make you rich where you sleep. All you have to do is follow his easy program to go from tenant to owner, and from owner to Automatic Millionaire Homeowner. The rest is automatic!

I will admit to being somewhat biased towards David Bach's books, having read two of his others and found them helpful: The Automatic Millionaire and Go Green Live Rich.

In some ways this book has been made badly outdated by the financial crisis of the previous and current year. However, it still has some good advice and some very helpful information.

Not owning my own home (yet), I don't know that all of the advice he gives is valid given things such as costs, but it makes sense, and David Bach explains terms and the like in a way that is easy for someone without a financial background to understand. There are some basic grids demonstrating how much a monthly mortgage payment is likely to be given a particular size mortgage, interest rate and length of time, things I didn't see in some of the other books I glanced through. There's also some advice on ways to pay off a mortgage faster (along with warnings of possible penalties).

The author explains what many of the terms: sub-prime, amortization rate etc. all mean in ways that I could understand, which is something I really liked, along with explaining the processes a person needs to go through when applying for a mortgage. All of that is helpful, and unlikely to be outdated in the near future.

On the other hand, he's suggesting things like buying with no down-payment or going sub-prime, things that may have been easy to do when the book was published, but not now. That's what I meant when I said the book is now outdated.

Still, it's a fun and educational read for someone who's thinking of buying their own place in the relatively near future. Read it as you're thinking and planning, then find something newer as the time comes closer to make decisions.

I will note that this is the Canadian Edition. I don't know how much of a difference there is between this one and any other edition.