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The Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get On with Your Life
In 1998, after thirteen years of providing investment advice for Smith Barney, Bill Schultheis wrote a simple book for people who felt overwhelmed by the stock market. He had discovered that when you simplify your investment decisions, you end up getting better returns. As a bonus, you gain more time for family, friends, and other pursuits.The Coffeehouse Investor explains why we should stop thinking about top-rated stocks and mutual funds, shifts in interest rates, and predictions for the economy. Stop trying to beat the stock market average, which few “experts” ever do. Instead, just remember three simple Don’t put all your eggs in one basket. There’s no such thing as a free lunch. And save for a rainy day.By focusing more on your passions and creativity and less on the daily ups and downs, you will actually build more wealth—and improve the quality of your life at the same time.
236 pages, Kindle Edition
First published November 25, 1998
183 people are currently reading
1913 people want to read
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Displaying 1 - 30 of 118 reviews
November 23, 2011
While researching lazy portfolios, I came across the Bogleheads site. On the site were many references to this book, so I picked it up from the library.
The book's premise exactly matched what I'm looking for; it tells you how to unclutter your financial life and focus on the things that you enjoy. To do this, you need to put your investments on autopilot, and tune out Wall Street and the daily ups and downs of the market, along with all the newspapers, stock tickers, magazines, websites, blogs, and financial advisers that promise to help you beat the market. In this way, the advice is similar to Vanguard founder John C. Bogle's stance in The Little Book of Common Sense Investing. In fact, Schultheis admits to being a fan of Bogle.
This book is high on my list of recommendations for investors of any skill level. It's a quick read, is easy to understand, and provides a good general financial plan.
Notes
3 Lifelong Principles
1. Asset allocation. Don't put all your eggs in one basket. Diversify your assets to maximize your chances of reaching your goals with minimal risk.
2. Approximate the stock market average. There is no such thing as a free lunch. Markets are efficient, so don't try to beat the market. Capture the entire return of each asset class.
3. Saving. Save for a rainy day. Develop a long-term saving and spending plan.
Less than 10% of American millionaires are active traders. 42% of American millionaires make less than 1 portfolio transaction per year.
Asset allocation models
20-45 conservative
70% stocks
20% bonds
10% cash
20-45 aggressive
100% stocks
0% bonds
0% cash
Common stock portfolios
1 index fund approach
• total/entire stock market
3 index fund approach
• large cap
• small cap
• international index fund
6 index fund approach
• large cap
• large cap value
• small cap
• small cap value
• international
• REITs (real estate)
Aggressive portfolio
• 40% large cap
• 35% international
• 25% small cap
• There's no connection between the financial fortunes of a company and its stock price. That's because a company's stock price isn't determined by the company itself; it's determined by the emotions of investors.
• Diversification means investing in different components of the market that have low short-term correlation, but similar expected long-term results.
• If you must have fun with your investing, invest 5-15% of your portfolio in individual stocks. Just be prepared for lower long-term returns than the assets you have in boring index funds.
The book's premise exactly matched what I'm looking for; it tells you how to unclutter your financial life and focus on the things that you enjoy. To do this, you need to put your investments on autopilot, and tune out Wall Street and the daily ups and downs of the market, along with all the newspapers, stock tickers, magazines, websites, blogs, and financial advisers that promise to help you beat the market. In this way, the advice is similar to Vanguard founder John C. Bogle's stance in The Little Book of Common Sense Investing. In fact, Schultheis admits to being a fan of Bogle.
This book is high on my list of recommendations for investors of any skill level. It's a quick read, is easy to understand, and provides a good general financial plan.
Notes
3 Lifelong Principles
1. Asset allocation. Don't put all your eggs in one basket. Diversify your assets to maximize your chances of reaching your goals with minimal risk.
2. Approximate the stock market average. There is no such thing as a free lunch. Markets are efficient, so don't try to beat the market. Capture the entire return of each asset class.
3. Saving. Save for a rainy day. Develop a long-term saving and spending plan.
Less than 10% of American millionaires are active traders. 42% of American millionaires make less than 1 portfolio transaction per year.
Asset allocation models
20-45 conservative
70% stocks
20% bonds
10% cash
20-45 aggressive
100% stocks
0% bonds
0% cash
Common stock portfolios
1 index fund approach
• total/entire stock market
3 index fund approach
• large cap
• small cap
• international index fund
6 index fund approach
• large cap
• large cap value
• small cap
• small cap value
• international
• REITs (real estate)
Aggressive portfolio
• 40% large cap
• 35% international
• 25% small cap
• There's no connection between the financial fortunes of a company and its stock price. That's because a company's stock price isn't determined by the company itself; it's determined by the emotions of investors.
• Diversification means investing in different components of the market that have low short-term correlation, but similar expected long-term results.
• If you must have fun with your investing, invest 5-15% of your portfolio in individual stocks. Just be prepared for lower long-term returns than the assets you have in boring index funds.
June 16, 2022
It was an interesting book to listen to but not quite the one I needed. But I kept going as it was quite intruiging to continue listen to
May 18, 2017
I bought this one a while ago when I started reading up on personal finance, but never got to it. Thought I'd finally pick it up.
Unfortunately, it just wasn't that good. I don't consider myself an experienced investor (not by a long shot), but this definitely didn't have anyhing I haven't read before. I found it was too basic and had too much fluff even for beginners. It didn't need to be over 200 pages long... the concepts could be condensed to probably 10 pages or less.
If you're just a beginner looking to get started in personal finance, there are much better and much more informative books out there than this one.
Unfortunately, it just wasn't that good. I don't consider myself an experienced investor (not by a long shot), but this definitely didn't have anyhing I haven't read before. I found it was too basic and had too much fluff even for beginners. It didn't need to be over 200 pages long... the concepts could be condensed to probably 10 pages or less.
If you're just a beginner looking to get started in personal finance, there are much better and much more informative books out there than this one.
August 17, 2011
I think that this book might have been the simplest investing book I've read - yet it has done the most to change my investment paradigm. While it is not for the experienced investor, it is a great primer for someone who is just starting out.
To summarize: invest in indices, as they spread your risk, reduce fees and taxes, and minimize the amount of oversight that is needed.
It's a pretty simple concept, but with promise (gamble) of playing the market, I did feel like I benefited from a full book to drive home the point. I found myself wanting to agree with the author's premise, and then respond: "but...". No buts. If you want to gamble than chose individual stocks. If you want money for retirement that grows, chose an index, or if that isn't available, invest in a mutual fund that approximates the index.
They have a website, which is here: http://www.coffeehouseinvestor.com/
To summarize: invest in indices, as they spread your risk, reduce fees and taxes, and minimize the amount of oversight that is needed.
It's a pretty simple concept, but with promise (gamble) of playing the market, I did feel like I benefited from a full book to drive home the point. I found myself wanting to agree with the author's premise, and then respond: "but...". No buts. If you want to gamble than chose individual stocks. If you want money for retirement that grows, chose an index, or if that isn't available, invest in a mutual fund that approximates the index.
They have a website, which is here: http://www.coffeehouseinvestor.com/
March 11, 2023
I read one of the old ass editions of this book, with the green cover, so I don't know if the updated editions are any different, but The Coffeehouse Investor posits two simple, but very important principles: 1.) Stay the hell away from mutual funds, and 2.) Invest consistently. Like I said, very important concepts! The author spends most of the book supporting the first argument, while talking about how much he wishes he were mountaineering instead.
He really does not want you to entrust your money to actively managed fund managers. And he's right! Read this book if you need the simple fact that the vast majority of these products do not beat any gains you would have made by just investing in an index fund that tracks the S&P 500 beaten into you. The second concept will ground you to the reality that you need to set aside enough money every month to continue investing, like with any other expense. That's a must with any type of investing. That's as passive as passive investing gets. I would have preferred that he used the span of the book's pages to talk about other concepts, or say more about what one should do when trying to invest money as passively as possible.
Currently, I don't hold any index fund positions. I realized I am a much more active investor than I thought, and probably never will be a passive investor. I don't know what Bill Schultheis would think of that, but I will continue to apply his two simple, yet powerful principles.
He really does not want you to entrust your money to actively managed fund managers. And he's right! Read this book if you need the simple fact that the vast majority of these products do not beat any gains you would have made by just investing in an index fund that tracks the S&P 500 beaten into you. The second concept will ground you to the reality that you need to set aside enough money every month to continue investing, like with any other expense. That's a must with any type of investing. That's as passive as passive investing gets. I would have preferred that he used the span of the book's pages to talk about other concepts, or say more about what one should do when trying to invest money as passively as possible.
Currently, I don't hold any index fund positions. I realized I am a much more active investor than I thought, and probably never will be a passive investor. I don't know what Bill Schultheis would think of that, but I will continue to apply his two simple, yet powerful principles.
February 19, 2021
As someone who is brand new to investing, I have to worry that books will be filled with too much jargon and other ideas that will go over my head. After finishing this book, I now know why it's so highly recommended. This book is great for brand new investors as well as seasoned investors. Schultheis keeps it simple and boils it all down to three principles: save, invest, and plan. I'll be revisiting this book at some point just for some reminders of the fundamentals. Although I didn't have an issue with it, towards the end of the book, it gets pretty spiritual. So if you're not into that stuff, be prepared.
April 21, 2018
Simple approach to long-term stock investment
October 15, 2016
Nice book. Some really interesting ideas. The redundancy is a major turn off. So much that I didn't finish the last couple of chapters (I was ready for this book to be over)
November 20, 2020
Some solid, but also basic, content, unfortunately dispersed in a sea of filler pages.
May 11, 2021
This is the First book I’ve read entirely devoted to the topic of investing. Schultheis kept it very simple, which I appreciated as a novice learner. Would definitely recommend this book to anyone who is looking to start building a foundational knowledge of investing and saving for retirement.
July 15, 2013
I really should have read this before I read the Bogle book because it covers many of the same ideas about index funds and how to invest and why, but in a much simpler and less in depth format. This is a good companion to the "The Bogleheads' Guide to Investing," especially as a way to ease into the idea that you can really can do much better investing on your own as long as you are smart about it. And you absolutely do not need to hand your money over to someone else to do it for you. Bill could be kind of cute, but I thought it worked here because money is boring. Investing is boring. Planning out a retirement is super boring. But doing it right is really important.
January 24, 2016
A lot of fluff that could have been condensed to 10 pages. Schultheis' 3 basic principles (diversify, no free lunch, save for a rainy day) is all there is to this book. Basically, invest in index funds, no mutual funds because they tend to underperform index funds and they have expensive fees, and if you really want to experience the "thrill of investing" then do it with individual stocks instead of mutual funds.
November 7, 2018
I had a very hard time completing this book and ended up skimming. The overall message of the book was diversify your portfolio, save for a rainy day and don't pay attention to stocks/put all your money in mutual funds. All of which seem very obvious and don't really need a 180 pages dedicated to it.
January 13, 2018
The main content of this book is in the three principles of investing outlined by Schultheis: don’t put all your eggs in one basket; there’s no such thing as a free lunch; and save for a rainy day. This could have been summarized in 10 pages rather than 200 pages of autobiographical accounts.
February 20, 2021
Let me start by saying that I highly recommend this book. It was fantastic. I devoured it within 24 hours. I never thought I would say that about a book on investing. I am so thankful that I chose this book over all of the other investing books out there.
Thanks to the GameStop incident, Chris has recently gotten into the stock market. He has embraced his hobby completely and is now constantly researching stocks, buying and selling stocks, and talking about stocks. My only stock market education occurred when my grandmother purchased me Under Armour stocks as a present throughout highschool. She told me to not worry about if the prices go up or down... just check it every year or so and don't worry about it. So I took her advice to the extreme and never checked it. Then in college, I made a Roth IRA, put a thousand dollars into it, and then forgot about it until now. Back then, I selected 3 random mutual funds, one of which had the word "Cullen" in the title because, you know, Twilight is life. Out of those 3 mutual funds, the Cullen one is the only one that has lost money, so my investment strategy was apparently not the best. I will never sell it, though, because Twilight is still life.
Now that Chris has become obsessed with the stock market, I decided it was time to learn a bit more about this whole thing. I should probably mention that I do have a retirement plan with work- but I just let them pick whatever they recommended because they are the experts and I had no idea what I was doing. So I have not been completely neglecting my future-- I have just been letting other people manage it.
I did what I always tend to do when I want to learn about a new subject- I went to the library and checked out every investment book that they had on the shelf. Once I got them all home and perused them a bit, I selected "The New Coffeehouse Investor" as my teacher. I made SUCH a good decision.
This book is fantastic. It is not dull and boring and it does not use hard-to-understand terminology... It is PERFECT. It starts out small and slowly adds in each piece of information building on what you need to know about the stock market to understand what you are doing AND it does it in a slightly amusing way.
The investment strategy it is promoting is perfect, as well. I don't want to spend a lot of time researching stocks and trying to figure out which companies will be successful. I love the idea of index funds. I love the advice on asset allocation. I no longer feel completely overwhelmed when I think about saving for retirement- I now have an understanding of what I need to do and how to hopefully do it.
I now understand what the heck the financial guy was saying when I registered for my work's retirement plan. I look forward to going into my account to see how it has been set up and figure out how I should adjust it to fit my risk tolerance and newfound admiration of index funds.
Thanks to the GameStop incident, Chris has recently gotten into the stock market. He has embraced his hobby completely and is now constantly researching stocks, buying and selling stocks, and talking about stocks. My only stock market education occurred when my grandmother purchased me Under Armour stocks as a present throughout highschool. She told me to not worry about if the prices go up or down... just check it every year or so and don't worry about it. So I took her advice to the extreme and never checked it. Then in college, I made a Roth IRA, put a thousand dollars into it, and then forgot about it until now. Back then, I selected 3 random mutual funds, one of which had the word "Cullen" in the title because, you know, Twilight is life. Out of those 3 mutual funds, the Cullen one is the only one that has lost money, so my investment strategy was apparently not the best. I will never sell it, though, because Twilight is still life.
Now that Chris has become obsessed with the stock market, I decided it was time to learn a bit more about this whole thing. I should probably mention that I do have a retirement plan with work- but I just let them pick whatever they recommended because they are the experts and I had no idea what I was doing. So I have not been completely neglecting my future-- I have just been letting other people manage it.
I did what I always tend to do when I want to learn about a new subject- I went to the library and checked out every investment book that they had on the shelf. Once I got them all home and perused them a bit, I selected "The New Coffeehouse Investor" as my teacher. I made SUCH a good decision.
This book is fantastic. It is not dull and boring and it does not use hard-to-understand terminology... It is PERFECT. It starts out small and slowly adds in each piece of information building on what you need to know about the stock market to understand what you are doing AND it does it in a slightly amusing way.
The investment strategy it is promoting is perfect, as well. I don't want to spend a lot of time researching stocks and trying to figure out which companies will be successful. I love the idea of index funds. I love the advice on asset allocation. I no longer feel completely overwhelmed when I think about saving for retirement- I now have an understanding of what I need to do and how to hopefully do it.
I now understand what the heck the financial guy was saying when I registered for my work's retirement plan. I look forward to going into my account to see how it has been set up and figure out how I should adjust it to fit my risk tolerance and newfound admiration of index funds.
December 22, 2021
I have little to no knowledge of stocks and investing, so I was hoping for a simple book that would get me started in the right direction. Maybe a bit mindless, but I choose this book from a list of other recommended financial books because I liked the cover and the title - it gave me this feeling that I could follow a few key tips in investing and then sit back & enjoy my coffee as the investment grew on its own.
I think this book turned out to be an excellent choice for me; it was very helpful without being too detailed, and it was especially reassuring in that it explains how you don't actually have to read lots of annual company financial reports and keep up with the latest Wall Street news in order to invest your money and do reasonably well. In fact, the author actively discourages such tedious work and promotes focusing on enjoyable activities instead. Like I said, very relieving to hear and exactly what I was looking for.
My only criticism is that I felt this book was a bit ramble-y in places and could've been a lot shorter and concise if the repetitiveness (he repeats concepts previously explained and literally repeats himself at times) and the anecdotes were removed. It feels a little like he couldn't think of what else to say, but really needed to reach a word count. But, I did enjoy some of the tangents, such as his younger brother's journey to becoming a pilot and the pumpkin pie recipe in the pie chapter - which must be one of the best chapters (or maybe the chapter with the "Outfox the Box" game is the best... I can't decide.) They were nice sometimes - something for usual fiction readers to grasp onto in the midst of all the financial talk. Overall, I don't mind the fluff too much, but I suspect some people may be annoyed or put off by it. Information-wise, the first half was definitely more helpful than the second half. Still, it's a good book to kick-start your investing journey.
~~~
General Notes
3 Lifelong Principles:
1. Don't put all your eggs in one basket
(diversify your assets)
2. There is no such thing as a free lunch
(attempting to beat the market probably won't work in the long run; go with capturing the return of the stock market average)
3. Save for a rainy day
3 Principles of Investing:
1. Asset allocation
2. Approximate the stock market average
3. Saving
Asset Allocation Models:
age 20-45
conservative:
10% cash, 20% bonds, 70% stocks
aggressive:
0% cash, 0% bonds, 100% stocks
Three-Index-Fund Approach:
aggressive:
40% large-company stocks, 25% small-company stocks, 35% international stocks
conservative:
60% large-company stocks, 5% small-company stocks, 35% international stocks
Six-Index-Fund Approach:
* large-company
* large-company value
* small-company
* small-company value
* international
* REITS
I think this book turned out to be an excellent choice for me; it was very helpful without being too detailed, and it was especially reassuring in that it explains how you don't actually have to read lots of annual company financial reports and keep up with the latest Wall Street news in order to invest your money and do reasonably well. In fact, the author actively discourages such tedious work and promotes focusing on enjoyable activities instead. Like I said, very relieving to hear and exactly what I was looking for.
My only criticism is that I felt this book was a bit ramble-y in places and could've been a lot shorter and concise if the repetitiveness (he repeats concepts previously explained and literally repeats himself at times) and the anecdotes were removed. It feels a little like he couldn't think of what else to say, but really needed to reach a word count. But, I did enjoy some of the tangents, such as his younger brother's journey to becoming a pilot and the pumpkin pie recipe in the pie chapter - which must be one of the best chapters (or maybe the chapter with the "Outfox the Box" game is the best... I can't decide.) They were nice sometimes - something for usual fiction readers to grasp onto in the midst of all the financial talk. Overall, I don't mind the fluff too much, but I suspect some people may be annoyed or put off by it. Information-wise, the first half was definitely more helpful than the second half. Still, it's a good book to kick-start your investing journey.
~~~
General Notes
3 Lifelong Principles:
1. Don't put all your eggs in one basket
(diversify your assets)
2. There is no such thing as a free lunch
(attempting to beat the market probably won't work in the long run; go with capturing the return of the stock market average)
3. Save for a rainy day
3 Principles of Investing:
1. Asset allocation
2. Approximate the stock market average
3. Saving
Asset Allocation Models:
age 20-45
conservative:
10% cash, 20% bonds, 70% stocks
aggressive:
0% cash, 0% bonds, 100% stocks
Three-Index-Fund Approach:
aggressive:
40% large-company stocks, 25% small-company stocks, 35% international stocks
conservative:
60% large-company stocks, 5% small-company stocks, 35% international stocks
Six-Index-Fund Approach:
* large-company
* large-company value
* small-company
* small-company value
* international
* REITS
December 13, 2017
As stated in countless other reviews, the premise and message in this book is rather simple: If you want to have money for retirement, save as much as you can and invest those savings in indexes that track the overall performance of market. The reverse is to gamble, and try to beat the market - something reserved for having fun and money you are willing to lose. This is sound advice and arguing against it seems unwise (mostly because there are countless other books and investors offering the same advice - checkout the million dollars challenge with Warren Buffett). If you’re still not convinced, just pull up a graph that shows something like the S&P500 since its inception. Spread out over time, that graph clearly shows why investing in the stock market with sound, tested principles is a viable path to retirement wealth.
There is more to it as well though. You should have periodic review of your investments... even if they are in indexes. You should map out your investments over time, so you know when you should diversify and can minimize heavy losses closer to retirement. You should also verify fees associated with your investments. For example, mutual funds, even when the fees feel low (say 1%) accumulate over time, and when mixed with the cost of churn (constantly buying and selling stock) can become incredibly expensive over the long term (hundreds of thousands of dollars expensive).
It’s information like what I mention above that warrants the five star review. I consider myself and intelligent guy, and I’ve certainly been lured by the appeal of making money in the stock market... but always turned away, not wanting to risk my savings. I had zero understanding of how all this worked, and consider myself much more informed. In a way it took a lot of the magic out of investing, and that’s exactly what I needed.
What this book is not, is a guide to wealth across all facets. It does not aim to make you a millionaire in ten years with just $100. If you are closer to retirement than others, you must expect to build less wealth. If you can’t save any money, but have time you may be in a similar boat. I’d say the target audience are readers that are putting money in their 401k (maybe not as much as the should), and had no real idea which funds to pick. If you keep that in mind, and that matches you, this book is probably all you will ever need. As a bonus, you will also get some sage life advice along the way.
There is more to it as well though. You should have periodic review of your investments... even if they are in indexes. You should map out your investments over time, so you know when you should diversify and can minimize heavy losses closer to retirement. You should also verify fees associated with your investments. For example, mutual funds, even when the fees feel low (say 1%) accumulate over time, and when mixed with the cost of churn (constantly buying and selling stock) can become incredibly expensive over the long term (hundreds of thousands of dollars expensive).
It’s information like what I mention above that warrants the five star review. I consider myself and intelligent guy, and I’ve certainly been lured by the appeal of making money in the stock market... but always turned away, not wanting to risk my savings. I had zero understanding of how all this worked, and consider myself much more informed. In a way it took a lot of the magic out of investing, and that’s exactly what I needed.
What this book is not, is a guide to wealth across all facets. It does not aim to make you a millionaire in ten years with just $100. If you are closer to retirement than others, you must expect to build less wealth. If you can’t save any money, but have time you may be in a similar boat. I’d say the target audience are readers that are putting money in their 401k (maybe not as much as the should), and had no real idea which funds to pick. If you keep that in mind, and that matches you, this book is probably all you will ever need. As a bonus, you will also get some sage life advice along the way.
December 13, 2023
So I have been reading a lot of financial books. Mostly because I’m 22 and 60 is not that far away. It feels like it is but it’s not. In fact I read a book that said we have roughly around 4,000 weeks to live.
I also listened to a podcast with Jane Fonda and she described her life in acts. The first act is your first 30 years of life, the second act is the next 30 years, and your third and final act is the last 30 years.
I used to love musicals and plays. Musicals and plays taught me that third act is the most important. It can make sense of the first two acts and redeem unlikeable characters.
Essentially what I’m saying is the last act of my life is important. It will be important and I will be damned if I spend my retirement broke. So I’m making sure that doesn’t happen.
However, I really don’t want to spend my lifetime before retirement obsessing over the stock market, trying to find a get rich quick scheme, or obsessing over trying to make it big off a single stock.
I want to invest, check in on my investment every quarter and really indulge in the things I care about like dancing, making cute little music videos with my friends, reading romance novels, and traveling.
So if ur life me and u want to ignore straight men, Wall Street and get on with your life. This is the book for you!
Also what I appreciate about Schultheis is that he didn’t write me an instruction manual about the stock market. He wrote me a story where he talks about his crazy clients who made him climb a mountain and how him and his brother flew a plane on his family farm and I thought his brother was gonna die. I think he thought his brother was gonna die.
This is a great book. It’s a story an informative one :).
I also listened to a podcast with Jane Fonda and she described her life in acts. The first act is your first 30 years of life, the second act is the next 30 years, and your third and final act is the last 30 years.
I used to love musicals and plays. Musicals and plays taught me that third act is the most important. It can make sense of the first two acts and redeem unlikeable characters.
Essentially what I’m saying is the last act of my life is important. It will be important and I will be damned if I spend my retirement broke. So I’m making sure that doesn’t happen.
However, I really don’t want to spend my lifetime before retirement obsessing over the stock market, trying to find a get rich quick scheme, or obsessing over trying to make it big off a single stock.
I want to invest, check in on my investment every quarter and really indulge in the things I care about like dancing, making cute little music videos with my friends, reading romance novels, and traveling.
So if ur life me and u want to ignore straight men, Wall Street and get on with your life. This is the book for you!
Also what I appreciate about Schultheis is that he didn’t write me an instruction manual about the stock market. He wrote me a story where he talks about his crazy clients who made him climb a mountain and how him and his brother flew a plane on his family farm and I thought his brother was gonna die. I think he thought his brother was gonna die.
This is a great book. It’s a story an informative one :).
May 21, 2020
Basically a 200 page book that beats the following three simple rules into your head:
1) Don't put all your eggs in one basket (asset allocation)
2) There's no such thing as a free lunch (approximate the stock market average)
3) Save for a rainy day (saving)
Easy read, basic philosophy is: invest in stock indexes / bonds (depending on risk tolerance) and stick to your plan, which allows you to free yourself from the dependence of the stock market (i.e. constant evaluation to beat the market) and use that time to focus on other aspects of life (i.e. travel, hobbies, side hustle, etc.). I don't disagree with the philosophy, it's definitely legitimate and allows you to avoid market risk and inflation risk. The author also provides insight that mutual funds and other forms of investing (i.e. day trading, hedge funds, etc.) more often than not don't beat the market. Book is a bit outdated for some references (this 3rd edition published 2009).
Takeaways:
-Asset allocation: Age 20-45 (Conservative - 10% cash / 20% bonds / 70% stocks; Aggressive - 0% cash / 0% bonds / 100% stocks), Age 46-60 (Conservative - 10% cash / 20% bonds / 70% stocks; Aggressive - 10% cash / 20% bonds / 70% stocks), Age 60+ (Conservative - 10% cash / 70% bonds / 20% stocks; Aggressive - 10% cash / 30% bonds / 60% stocks)
-Don't invest in mutual funds (fees take a large portion of wealth away)
-Check out the following for ETFs: dfaus.com, etfzone.com, ishares.com, morningstar.com, vanguard.com
-Goes through a retirement worksheet to determine how much per month you need to save for retirement to live comfortably (not a bad exercise)
1) Don't put all your eggs in one basket (asset allocation)
2) There's no such thing as a free lunch (approximate the stock market average)
3) Save for a rainy day (saving)
Easy read, basic philosophy is: invest in stock indexes / bonds (depending on risk tolerance) and stick to your plan, which allows you to free yourself from the dependence of the stock market (i.e. constant evaluation to beat the market) and use that time to focus on other aspects of life (i.e. travel, hobbies, side hustle, etc.). I don't disagree with the philosophy, it's definitely legitimate and allows you to avoid market risk and inflation risk. The author also provides insight that mutual funds and other forms of investing (i.e. day trading, hedge funds, etc.) more often than not don't beat the market. Book is a bit outdated for some references (this 3rd edition published 2009).
Takeaways:
-Asset allocation: Age 20-45 (Conservative - 10% cash / 20% bonds / 70% stocks; Aggressive - 0% cash / 0% bonds / 100% stocks), Age 46-60 (Conservative - 10% cash / 20% bonds / 70% stocks; Aggressive - 10% cash / 20% bonds / 70% stocks), Age 60+ (Conservative - 10% cash / 70% bonds / 20% stocks; Aggressive - 10% cash / 30% bonds / 60% stocks)
-Don't invest in mutual funds (fees take a large portion of wealth away)
-Check out the following for ETFs: dfaus.com, etfzone.com, ishares.com, morningstar.com, vanguard.com
-Goes through a retirement worksheet to determine how much per month you need to save for retirement to live comfortably (not a bad exercise)
May 31, 2017
Excellent. From a pure investing standpoint, this book is all you need to build a great portfolio. And I say that as someone who provides financial planning advice and oversees investment portfolios for 190 families as a Certified Financial Planner.
My only quibble is that Schultheis did not spend much time addressing cash flow and debt. He does provide a handy worksheet on p. 90 that can give people a clue on how much to save, but I don't recall him giving much advice about how to save more money.
Most Americans are saving far too little of their income today. Even if someone implemented Schultheis' advice in this book 100% to the letter, yet they saved just 5% of their income toward retirement (which is the approximate average savings rate today in America), they will still be under-funded for retirement.
If you pair this book with Your Money or Your Life, you've got an excellent Personal Finance Canon upon which you can easily become financially independent (meaning work is optional).
My only quibble is that Schultheis did not spend much time addressing cash flow and debt. He does provide a handy worksheet on p. 90 that can give people a clue on how much to save, but I don't recall him giving much advice about how to save more money.
Most Americans are saving far too little of their income today. Even if someone implemented Schultheis' advice in this book 100% to the letter, yet they saved just 5% of their income toward retirement (which is the approximate average savings rate today in America), they will still be under-funded for retirement.
If you pair this book with Your Money or Your Life, you've got an excellent Personal Finance Canon upon which you can easily become financially independent (meaning work is optional).
May 14, 2023
Even though I'd still consider myself a beginner to investing, there wasn't anything in this book that I haven't already heard before. This book is for people who are in the very beginning of their investment career and maybe need lessons with more fluff, less direct information. If you've read any other worthwhile investment book, it's likely that not much in here will benefit you, unless you just needed it worded differently (and more simply).
This book's principles can be summarized as follows: diversify your asset allocation, ignore the hoopla of Wall Street, simplify your investments to match the market, and be aware of the expenses associated with investing. In other words, pretty much common sense. I found this short book to be quite repetitive, likely with the aims of making the principles sink in, but unless this is your first book about investing, you probably already knew 90+% of the content.
This book's principles can be summarized as follows: diversify your asset allocation, ignore the hoopla of Wall Street, simplify your investments to match the market, and be aware of the expenses associated with investing. In other words, pretty much common sense. I found this short book to be quite repetitive, likely with the aims of making the principles sink in, but unless this is your first book about investing, you probably already knew 90+% of the content.
November 28, 2018
This is a simple and easy to read book for those starting out in investing and getting their financial life together. While I've never read bogles book this book seems to be based on his ideas and fundamentals.
The goal is to build a solid financial future and not spend all your time doing so.
The author points out the market is efficient, your are unlikely to beat the market so don't try to... you'll be ahead in the long run and you will spend less time on your savings .
He has three main principles
Asset allocation : diversify , goal to approximate the market , and savings . Simple right.
I like this book as it didn't get down into the nit and gritty of financial products . It's simple and basic and will likely set you up for a solid financial future .
The goal is to build a solid financial future and not spend all your time doing so.
The author points out the market is efficient, your are unlikely to beat the market so don't try to... you'll be ahead in the long run and you will spend less time on your savings .
He has three main principles
Asset allocation : diversify , goal to approximate the market , and savings . Simple right.
I like this book as it didn't get down into the nit and gritty of financial products . It's simple and basic and will likely set you up for a solid financial future .
August 19, 2019
Technically, this is a DNF for now. I lost interest about halfway through and wanted to return it to the library for other people to have a chance to read if they wanted it. It did help clarify a few concepts for me, but the repetition of certain other concepts was borderline-Dave Ramsey-annoying. I get why people like Bill and Dave are repetitious about their main money ideology, some people just won't listen the first three or four times they hear you say it. I'm already in the mindset of The Coffeehouse Investor, just like I was already in the Dave-ish mindset, so I glossed over the more repetitive areas. I'm definitely going to go back to this, but I think I'm going to buy my own copy so I don't feel so pressured to finish it in one go.
February 7, 2020
I wanted to read this book, because I have seen Bill Schultheis portfolio allocation on the internet and was hoping to get his take on how he developed it. The book started out good, easy read with some quick calculations on how to decide what you need to retire, however, after that there was no real information in this book. If you need to have someone explain why to use index funds instead of managed funds and why you need to save, this may be your book, but if you already have gained this knowledge and want to learn more, I would look to another financial book. That said, this is a really light read and for someone who wants to dip their toes into financial planning without being overwhelmed or confused, this is the book for them.
December 17, 2024
As others have stated, this book is informative, but it also is a bit heavy on filler trying to illustrate points that are geared more towards beginners. That said, I think the point of this book is aimed at all investors. The point being made simply doesn’t want to be heard by most; keep investing simple, you aren’t going to beat the market in the long run and nor will the majority of fund managers.
With the sheer amount of ETF and Funds on the market, this is just too easy to ignore, but ultimately the message is clear and the strategy is proven. Even the great Warren Buffett has stated this time and time again. If you can’t do the work, invest in index funds.
Scene.
With the sheer amount of ETF and Funds on the market, this is just too easy to ignore, but ultimately the message is clear and the strategy is proven. Even the great Warren Buffett has stated this time and time again. If you can’t do the work, invest in index funds.
Scene.
January 12, 2026
While posing great opinions and arguments about the stance of being a Boglehead, Scultheis seems to open up the discourse to the audience he has in mind: a young, strongheaded, adventurous, dreaming-of-immediate-success investor. Which I'd hope I'm not. In his effort to relate to his audience to get his point across, his arguments felt absolutely repetitive, and sometimes lacked logical backing and was surplus of fallacies.
Still, the evidence he represents is inarguable, and these ideas really make lots of sense. Reading this book really makes me want to build wealth for my future through passive and diversified investments through stock-market-indexing mutual funds.
Still, the evidence he represents is inarguable, and these ideas really make lots of sense. Reading this book really makes me want to build wealth for my future through passive and diversified investments through stock-market-indexing mutual funds.
September 30, 2024
I tried very hard to give this a try. I got maybe a quarter of the was through and had to stop. Other than the generic principles that most personal finance people say, there's not a whole lot going on in this book. I read it on a Kindle and the formatting was really really weird, not sure if that's just an ebook thing or not. It felt like he just keep on talking about being about to talk about something, and it always took a while to get there. I couldn't do it, save your time there are a lot of better books with the same concepts
March 30, 2020
This book is phenomenal for folks who are anxious about how to prepare for retirement, but also don’t want to sweat it too much. The author explains in layman terms about how to maximize your retirement portfolio and about why it’s much simpler than you’d think.
As someone in tune with finance, this book was a great lay down of what I’ve learned in life and the formulas & appendixes scattered in this book surely help me
As someone in tune with finance, this book was a great lay down of what I’ve learned in life and the formulas & appendixes scattered in this book surely help me
July 22, 2019
As someone who does not fully understand financial jargon, I really enjoyed this book! It was written in a way that people like me can understand. It puts the financial world into terms that anyone can relate to, and simplifies what the financial world tries to make look complicated and over the average person’s head. I highly recommend this book!
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