The Four Pillars of Investing: Lessons for Building a Winning Portfolio

This is the first book about money management I've read and it is interesting because of its confirmation of things I thought I knew already. Such as "stock brokers" and investment advisors are crooks (or at least not very honest), and speculation/investment success is statistically proven just pure luck.

The main advise in the book is to go with lowest fee possible for biggest market spread possible (index funds). To expect some very bad years and be happy about them since that allows for higher future returns. To not expect more than the historical returns of investments (since the base value of a company is its earning and every growth beyond that is a temporary bubble that will eventually adjust itself). To divide the savings into show more multiple groups with set relative sizes of the portfolio and use re-balancing techniques to enforce buying of "unpopular" (thus cheap) investments and selling of "popular" (thus overpriced) investments.

At least the first 80% of the book I'd recommend to anyone though it's slightly US-centric so some flexibility will be needed to map to another environment. The last 20% is very US-centric and not very useful for us living elsewhere.

Just some more elaboration on the "stock brokers are crooks part". The main thing to remember is that they need to earn a living and where their main source of income is. Figuring out that and you will realize that their advise is intended to slowly funnel money from you to them until you are out of said money. Even if it's "only" 1-2% per year that will over time be enough to make you poor and them rich, especially as they are unlikely to find a better investment than a low-fee index fund anyway (which they will never recommend since that would mean no money to them). To make things more interesting they have this unhealthy relationship with the economy journalists, many who will only get published if they publish positive recommendations. It's a sick place and the less contact you have with it the better. show less

I think of this as the simplified, application oriented version of A Random Walk Down Wall Street. It was decent, but a Random Wall will give you more background and a deeper inside into the suggested strategy.

Provides history, basics, a plan and the psychology of financing. You’ll never hire a broker again.

After reading this book, I assigned it to my middle school math class that I was teaching. Once they were done reading it, they had to manage a Google Stocks portfolio and we monitored their success.

His four pillars are really one: use a mutual fund which indexes the entire market. Walking the dog example for the stock market.

I suck at investments. (and I work for a bank)
I honestly don't feel like I know any more coming out of this book then I did going in. I think I am going to pick up Investing for Dummies I might learn a little more.

Was enjoyable as an audiobook so it gets an extra star for that