Customer Reviews

Discover the Wealth Within You: A Financial Plan For Creating a Rich and Fulfilling Life

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This is Ric Edelman's fourth HarperBusiness book on money and finance. Edelman's 400-page tome is divided into three parts:

I. Part I covers the pursuit of happiness and how to achieve your goals (122 pages)
II. Part II focuses on selecting the most appropriate investment vehicles (102 pages)
III. Part III reviews how to select the best mutual funds for your needs (123 pages)

Overall, the book is an enjoyable read and fully researched, although Part I could have been a book by itself. The layout is pleasing to the eye - numerous charts, cartoons, tables, lists, highlighted text, examples and anecdotes. Edelman supports his material with 219 footnotes (most are personal comments that should in the text rather than placed as footnotes on the bottom of the page) and 51 sourcing footnotes in the appendix.

In Part I, Edelman helps you create a list of goals by providing worksheets. Also provided is a list of questions, and activities to choose from that the reader is asked to fill in and select from, respectively, ranging from actions you'd like to do in your life to accomplishments to places and things you'd like to experience.

Edleman then covers how to achieve your goals by asking key questions. He provides insight on how to build a plan to achieve your goals and how much money is needed. He also covers the importance of not forgetting that long-term care insurance is critical.

In Part II, Edelman covers investments. He is a big fan of using the stock market to increase wealth because of the long-term positive returns, even considering the intervening bear markets. He believes that individuals that invest in cash equivalents (e.g., CDs, T-bills, and money market accounts) are harming themselves because of the ravages of inflation and the low total return compared to stocks.

Edleman provides an interesting table showing an investor's return from 1926 - 2000 based on the percentage of assets that are placed in stocks. For example, investing 0% of one's assets in the market resulted in an annual return of 5.4% (in bonds, for example). At 100% invested in stocks the annual return was 13.1%, and at 50% invested the annual return was 9.4%. Obviously, the higher percentage invested, the higher the annual return. Edelman further points out that over the last 100 years the market has gone up 70% of the time.

Edelman doesn't show 5-year periods or ten-year periods, so you cannot see the variance in different timeframes and the impact of bear markets. Over 74 years the market has gone up, but there have been 14 bear markets and some very severe ones including the most recent from the first quarter of 2000 to the current time. So, Edelman's table is not a true representation of the average investor's return. Interestingly, Edelman dismisses the current bear market as a normal bear market occurrence. This is hardly the case for many investors whose high-tech portfolios have been decimated between 50% - 90%. He does mention, later in the book, that a diversified portfolio would have softened the blow of the 2000 - 2001 bear market for many investors.

Edelman includes a chapter on why an investor should not invest in sector funds - you have to pick the right sector at the right time. He provides the performance of 13 sectors from 1984 to 2000 showing the variation in performance and the difficulty in picking the right sector.

There is another short chapter on the four ways you can buy your investments. He covers mutual funds, annuities, hiring an investment manager, and doing it yourself.

In Part III, Edelman spends 31 pages explaining Morningstar's star rating system, category rating, and style boxes. He believes that most investors pick their funds with the highest star ratings, but are disappointed when future performance is less than expected.
Edelman demonstrates that high star ratings do perform well in the future and shouldn't be used for predicting future returns. His long-winded explanation of Morningstar is a bit of overkill. Also, in early May the firm announced a change to their rating system to be implemented in the near future. So the value of this chapter may be minimal.

Edelman then spends 26 pages on how an investor should select mutual funds by understanding the principal of the standard deviation of different funds. He also provides a chart showing how long it takes to recover from different percentage losses (e.g., a fund losing 80% of its value will take 14 years to break-even assuming a 12% annual return). Edelman favors actively managed funds to index funds because, he says, that the latter haven't outperformed them.

Additional chapters in Part III cover how many funds do you need to be diversified, and active vs. passive management.

Edelman has strong opinions on how to invest. While I always don't agree with them, at least he presents his case with facts, statistics, and examples. Overall this book should provide the reader with useful insights into planning life's goals, enjoying them, and which investments to avoid in order to have the financial assets needed to live a good life.

What a pleasure it is to read someone like Edelman who is not only uniquely qualified to write on the subject of money but also writes in such a breezely easy to read style.

I just picked up this book after reading "What You Need to Do Now" and "Ordinary People, Extraordinary Wealth" by Edelman. The previous books helped me more than anything to overcome the bad advice I got from reading other financial books.

Besides Ric's books, I also recommend "The Road to Wealth" and "The Laws of Money" by Suze Orman. I believe that Ric and Suze are the two best financial authors out there right now. Both are CFP's and Ric's firm is ranked among the top 5 firms in the country by Bloomberg. Obviously Edelman would not have this many clients if he didn't know what he was doing now would he?

This is a book for personal finance. But it only concentrate on 2 main topics - setting up goals and picking up mutual funds. On goal setting, it is one of a few books that give such an emphasis (and proportion) on this topic. It is important, critical, but somewhat over-long. (Imagine listing several pages of places/events that help you to pick up for your goal?) The good side is that the importance of goal setting is applicable is many other areas - not just personal finance. The second half of the book is about mutual funds, and there are some very interesting 'facts' - e.g. Morning Star ratings, index fund, tax benefit, etc. Since the author is quite humorous, it is a very easy read for the 300+ pages. One thing I only like is that some of the footnotes are totally pointless - they are there just for the sake of being funny?? Maybe Ric can consider 2 labelling of footnotes - one is useful and the other is only joke.

I'm tired of boring books with columns of statistics, or the unsubstantiated ravings of "feel good" advisors. I bought this book because I enjoyed Edelman's "Financial Security in Troubled Times" and I was not disappointed. It is solid advice, and very well written. Yes, the author is humorous and entertaining, but who really wants to read 300 pages without any effort to smile? The cartoons that spice up the statistics are well chosen, and they reinforce the points. If you are looking for a textbook with which to put college students to sleep, look elsewhere. If you want to better understand how to set your goals, achieve them, and feel that you are in control of the financial products and the practices, then buy this book. But don't expect to recoup part of your cost by re-selling the used volume - you will want to keep this book, use and re-use it. And if you have a brother-in-law that needs a little help, buying him a copy will be cheaper than making a loan.

As long as the stock market was booming, Ric's advice will work. Now, it doesn't. Nowadays, Ric makes sure he has his disclaimers underlined broadly. Listen to his show and hear this!

Oh, you say, you did listen to Ric, and you refinaced your home for 30 years and put the money in the market and lost it all? Ric will tell you that you should've diversified more. Lost your job and can't make that bigger payment? Ric will tell you that you should have at least 6 months savings in the bank to cover your bills. What if you don't get a job in that time? Ric will tell you that you should have gotten a mortage with a payment that you could handle!

So, my advice is, forget Edelman. There are too many weak spots in his philosophy. Too easy to make a mistake and lose all you have.

He gives a lot of fabricated scenarios that give a lot of people the idea that they can apply his strageties to their lives and "create wealth." It's like Wade Cook who choses stocks AFTER they've gone up, then uses THOSE stocks as examples, supposedly that he picked early on. Telling the story backwards and you start thinking you can do that, too. ANYONE can tell you that if you bought IBM in the 1950's you'd be rich now.

Think about it. How did Edelman create his own wealth? Selling YOU books, selling YOU his ideas. Selling YOU a mortgage through his mortgage company. Charging YOU $300 a year to be his client. Did Ric make his money in the stock market? Who knows?

I know too many people that have LOST money following his advice!!!

My advice, and I've been very successful doing things this way, (properties worth almost $1,000,000 - paid for, not mortgaged, plus I have additional assets that no one can take from me, even if I can no longer work and I'm not yet 50) --

Buy a home that you can afford. Pay your mortage down asap. If you want to invest, save your money and invest it. If you lose it, at least you won't lose your house!

(My mutual funds took a hit recently, but it was all money that I can "afford" to lose, not equity from my home!)

Risk little, save a lot. Live within your means. Avoid paying interest, (credit cards, loans). YOu want to collect interest, not pay it.

Be very careful about anything that will cost you money and is supposed to be a "good tax break." The govt. can change the rules any time and take away that good tax break. Then where will you be?

I think it was WArren Buffet who said something along the lines, don't invest any money that you can't afford to lose. That is the best advice! YOU CAN'T AFFORD TO LOSE THE EQUITY IN YOUR HOUSE, no matter what Ric Edelmans says!

Don't try to get something for nothing. That's the way to lose something and wind up with nothing.

A wonderful book to help you open your eyes to what life can be all about besides the obligations.

Discover the Wealth Within You goes beyond offering the financial advise most of us can very well use. It's message is about discovering yourself by taking the time to ask yourself what you really want out of life.

Throughout this book, Ric Edelman shows you how to set goals and achieve the things you've always wanted to experience, but never had the guts to persue because you never knew where or how to begin and/or questioned how realistic your goals were.

I would recommend Ric's newest book, Discover the Wealth Within You, to all of those who are searching for a more rich and fulfilling life.

After reading through Ric Edelman's book, I'm wondering why this guy is such a popular author. Some of his advise is fine, but some is quite shocking. For instance, he doesn't believe that mutual fund costs are a big deal. That's stunning. Fund costs are the only thing that we investors can absolutely control. I always try to find excellent funds that cost far less than the typical ones. Over an investing lifetime someone doing this can save tens of thousands of dollars or more quite easily. Here's just one example: Let's suppose Investor A sunk $20,000 into a cheap index fund and Investor B sunk the same amount into an average-priced mutual fund (1.4% expense ratio). Both funds grew 11% a year. After 20 years, the cheap fund would be worth $155,539. The average priced one would be worth just $121,626. I was also disappointed that Edelman trashed index funds. Frankly, it's just about impossible to beat the market, which means the best we can hope for is to match market performance. The only way to do that is with inexpensive index funds, such as the ones offered by Vanguard. Someone who reads this book and avoids index funds and ignores fund expenses will probably end up loosing a ton of money unnecessarily.

This guy really has a way of taking into account the human elements of financial planning and explaining all that difficult to understand money stuff like no one else -- if you've ever read any of his other books you're already nodding your head in agreement.

This book goes past understanding the basics of how things work (The Truth About Money); and seeing how other people are getting rich (Ordinary People, Extraordinary Wealth); into how YOU can become wealthy. Discover the Wealth Within You is packed full of all the knowledge you would need to overcome struggling with your finances and motivate you toward a successful plan for your life, health and wealth. This is by far the most $valueable$ book than any of his previous titles.

If you're a math genius, you might find this too basic, but for the rest of us (99.9% of the population), this book is awesome and inspiring.

Thanks Ric!

p.s. Maybe this book should be in the spirituality section instead of the fincance section of the book store

I enjoyed ric's other book "The truth about money", and decided to purchase this book as well. Firstly, for someone who is looking for a tactical plan and something i can excute upon, this books provides very little help. Only the last few chapter provided some relevant information, the rest of the book was focusing on the inspire readers to invest, not exactly what i looking for. Secondly, a lot of the information is a rehash of the truth about money. I do like ric like a financial advisor, but wouldn't recommend this book

Edelman's new book, "Discover the Wealth Within You," tries to get the reader to move beyond typical goals such as funding retirement, buying a home, and sending a child to college. I went through several of his exercises, and am now planning two adventures that I had previously only dreamed about. He also tries to get people to see Morningstar as a much more valuable resource than just using their star rating system to select mutual funds. The book is certainly worth the money for anyone who needs some solid suggestions on how to put more fun in their life.