111 of 114 people found the following review helpful
on March 8, 2000
This is a good investment book and extremely cheap. The real cover is also much nicer than the one shown here. It is quite realistic. It does not advocate living below the poverty line so your can save up enough to retire early off the meager returns from treasury bonds in a meager retirement. The main focus is investing well during retirement so you can afford to live well in retirement. This in not primarily a lifestyle book but an investing book. Humility in investing is mentioned many times but not living a humble lifestyle. It says many places that if we lose all our nest egg from bad investments during retirement, it does not matter how humble a lifestyle we have, we are going back to work. The concept that we are all sold our asset allocations rather than choosing them is also a big part of this book. Since stocks and bonds generally go up and down at the same time, only a salesperson could have convinced us that buying both is diversification. I have never seen any book or heard any stockbroker or mutual fund representative ever recommend real estate as part of a retirement portfolio. Yet I know people who have made a fortune in real estate and live comfortably off real estate in retirement. This is the first book I know of that thinks outside the box of conventional retirement investment planning. It advocates choosing between stocks, bonds, real estate, international stocks, and several other asset classes. Since I have concerns that the U.S. stock market can continue as it has in recent years, I am glad to know there are other places I can make money to get me to an early retirement. There is also a chapter on surviving a market crash with your nest egg and sanity intact. This is looking like a very timely book. Good book, great price.
135 of 141 people found the following review helpful
on March 20, 2005
Format: PaperbackVerified Purchase
As a person who is on the verge of retirement, this is one of many investment and retirements books I've read recently. If you take the author's advice in your retirement strategy many of the authorities on retirement planning would tell you that you will run out of money in a very untimely way! Written near the end of the boom cyle of the 1990's the book suggests that you can safely withdraw 8% or more of your investments a year for living expenses. This is an extremely optimistic approach. Most current experts recommend a 4% or so withdrawal rate is much more realistic considering the long term analysis of the various markets. This was proposed by the landbreaking research in the Trinity study, written several years before the publication of this book and has become the predominent thinking of modern investment advisors.
I especially was miffed at a short discussion suggesting that managing and reducing your living expenses was much less important than your investment strategy. These two items go hand-in-hand and each has a vital place in retirement considerations.
You may wish to buy this book for it's decent discussion of the various investment markets, but there are far better out there. This discussion was only fair. I've found the books by Boggle and Berstein to be among the best.
If you should have the temptation of following the author's advice regarding spending habits and safe withdrawal rates from your investments, I would stongly recommend that you weight this against other expert advice on the subject.
58 of 61 people found the following review helpful
on March 31, 2000
I thought this book was great and I would highly reccommend it. No book can answer every question and this one is, of course, no exception. Edmunds has actually walked the talk and survived ups and downs in the markets. I think that his advice about investing in multiple non-correlated asset classes is actually quite sophisticated in a Modern Portfolio Theory sort of way. It reminded me of a practical version of the approach advocated by Larry Swedroe in "The only Guide to a winning investment strategy you'll ever need." Although US stocks have been the place to be for a while, they may decline or stagnate and diversification into foreign and developing country stocks and US real estate could once again outperform. In his Amazon review Dr. Grimmel compares Edmund's book unfavorably to several other books on early retirment- all of which have severe limitations of their own. Terhorst used only fixed income assets (Cashing in On the American Dream) in his initial retirement plan. That was a good move at the time, but he did get back into the stock market- after the book was written (I read about this on his web site). "Your Money or Your Life" by Dominguez and Robin is a great book about redefining needs and reducing expenses but the investment advice is wacky (government bonds alone + inflation doesn't matter.) All in all I think that Edmunds has written the best book on this subject.
33 of 33 people found the following review helpful
on June 8, 2000
Just imagine: retirement advice based on the real life experience of someone who has made it work for himself over nearly 20 years. Mr. Edmunds doesn't tell you to accumulate millions before you retire. He doesn't define "diversification" in terms of products he hopes to sell you. And he won't give you answers in terms only an MBA could understand.
Instead, he identifies 13 different asset classes (yes, 13!) and tells you quite simply which ones work, which ones don't, and how to create a workable portfolio to meet your needs. He uses numerous examples of people with differing needs and objectives, and shows how to apply his principals in each case. (Surely, one of them must be similar to your own...) But the world of finance is not static, so Edmunds goes a step beyond: he gives a detailed method for evaluating that new asset class you just learned about, and determining if it fits your needs.
While no book has all the answers, this one comes mighty close. I recommend it without reservation whether you have retired already, plan to retire soon, or are dreaming of the far-off future. For most folks, retirement is a question of assets rather than age, and this book can bring that dream closer than you might think.
51 of 54 people found the following review helpful
on February 28, 2000
This book is geared toward those with a nest egg of under $1million (but probably more than $500,000) who are considering early retirement. Unlike other books published by the financial industry and the like, this book added the dimension of sharing Mr. Edmunds' mental processes in dealing with tumultuous markets and in living off of his investments.
While the book was good overall and gives a nice basic blueprint for those who want to or need to live off their savings, I do disagree one major point. His basic premise is that you can get 8-10% returns relatively consistently and survive market crashes by diversifiying into various non-correlative asset classes. He correctly points out that the 1970s were a period where a retiree living on stocks and bonds would have gone bankrupt (at a 7% withdrawal rate). For this reason, he questions the wisdom in "traditional" 60/40 portfolios. But, truthfully, his answer won't save anyone from the problems of the traditional portfolio.
For instance, with communications as good as it now is, emerging markets (one of his asset classes) now tend to move with the US and other major world markets to one degree or another. Summer/Fall 1998 was a good example where everything went down, some markets more than others.
He also suggests putting as much as 1/3 of your nest egg into real estate, either through individual properties (a minefield for newbies) or through REITS. Real Estate, however will basically act like small cap stocks. And, as a hedge against market crashes, real estate isn't going to cut it. With the wealth effect gone in a crash, stores are going to close and people won't trade up houses, etc. It is true that real estate did well when stocks and bonds did poorly in the 1970s, but it's more probable that it would not hedge financial assets like that in today's world with everything so closely linked. Also, just as much of today's stock mania is due to baby boomers saving for retirement, much of the real estate boom of the '70's was due to baby boomers moving away from mommy.
He is right that you have to be diversified within the asset classes with things like real estate and emerging markets to smooth out the ride, but even that extra diversification won't save you from a 1930s or 1970s debacle if you're spending 7%.
The traditional answer is to spend only 2-5% per year, depending on age, to be sure you can live through long periods of decline in assets. But, truthfully, very few early retirees can get by on that small a spending percentage.(Their nest eggs are generally smaller than older retirees', they have much longer to live and because they are healthy and retired they have more to spend money on!) And since the book is geared toward early retirees, this is the issue!
Bottom line, in my humble opinion, is that Mr. Edmunds suggests accepting an increased risk of running out of money for the reward of telling the boss to take the job and shove it. He doesn't quite state it that way, but that is really how it plays out. The fact that HE retired in 1981 might cause him to see a rosier scenario than otherwise would be the case, as '81 was probably the best time in modern history to begin living off of financial assets.
I commend Edmunds, however, for pointing out that the current stock mania could very well give rise to 10-20 year periods of ho-hum or worse stock performance, like the 1968-1981 period. My only suggestion would be that he quantify better the chances of running out, especially as compared to traditional withdrawal rates of 2-5%.
As I stated earlier, I also give Edmunds high marks for doing a better job of describing the mental pitfalls of living off of a nest egg than the financial industry ever has. For this reason alone the book is worth it's relatively small price.
23 of 23 people found the following review helpful
on December 21, 2000
This is a remarkable book. It came out in January 2000. We would have all been better off if we followed this advice back then. I only recently bought the book. More accurately than any other investment book of the year 2000, it predicted the future. On page 212 it says, "It is insane to put all your retirement money in U.S. stocks. Why risk the chance of never being able to retire if you are wrong?" In fact, it cautions to not put more than one third of your retirement in U.S. stocks. Chapter 7 suggests that real estate will be a better asset class than stocks for the next decade. Since the day this book was published, this certainly has been true. Babyboomers need to save for retirement, it says. But they are better off saving in undervalued real estate than overvalued stocks. The returns will be higher. In chapter 9, the author states that oil and gas will be excellent investments for the next decade. So far that too is right on the money. There are a lot more excellent suggestions in this book. It cost less than one trade at my discount broker. Damn I wish I bought this book in January 2000. I'm going to buy his REIT report as soon as it comes out....
16 of 16 people found the following review helpful
on October 4, 2000
I've read just about every book written in the last couple years about early retirement. If I could read just one book, then this would be the one. This book give comprehensive advice on both the financial and psychological (which is the more difficult one for me) aspects of early retirement. This book make me feel empowered to reach my dreams. After a quick calculation I happily found out that early retirement is an option for me right now! And the book contains some great financial tools for both current and future retirees.
15 of 15 people found the following review helpful
on May 31, 2000
This book is extremely readable with specific instructions on how to proceed if you want to get monthly income out of your nest egg while protecting against market ups and downs, and even make your investment grow.
I find Mr. Edmunds brilliant in giving me the information I need to capitalize on my investments.
I loved it! Lots of specifics.
It gave me the confidence to move forward and stop relying on my broker's information.
Thank you sir! You have changed my life. As I get closer to retirement, I have been wondering how to generate cash from my investments and this book gave me that information. The idea of dividing your investments among several asset allocations that are not on the same cycle is not a novel idea, but to tell me which groups are in sync with, and out of sync with each other, and why, gives enough information to actually make decisions. Also, there is information on how to do your go about doing your homework if you want to learn more about a specific asset allocation.
I know I can depend on what Mr. Edmunds has to say as everything I have read in this book agrees with my experience of investing in the past 15 years.
I am sending a copy of this book to all my loved ones.
I have also enjoyed his website. Check it out!
17 of 18 people found the following review helpful
on January 14, 2000
In 1981, when I was 29 years old, the company I worked for folded and everyone was laid off. I made the decision to live for a while off investments. It was not clear if I had enough to live for five years, ten, or forever. After interviewing at least 10 stockbrokers, about 10 money managers, and many insurance salesmen and realtors, my confusion had increased. Yet despite the fact that none of these sales representatives could answer the basic question, how long can I last living on my investments, they hounded me with phone calls wanting to handle my account. Over the next decade, I figured out how to maximize my returns and minimize my volatility such that I, my wife, and two minor children lived well and securely off our investments. Unfortunately, in 1994 I got divorced and lost much more than half of my investments. Again, I was faced with this question, do I have enough to live off the rest of my life? Over the preceding 14 years I had devised formulas and concepts that I used to answer that question at the end of each calendar year. So I simply applied those concepts to my new circumstances. But it occurred to me that many other people were in the same situation and yet there was no book to answer life? If so, how do I invest to assure I never have to go back to work again? If not, how much more do I need and how do I get it. This book answers those questions and more. Retire Early, Live Well is written from personal experience not by someone trying to sell stocks, mutual funds, annuities, real estate, or money management services. The only thing I am selling is ideas. No financial products are endorsed or promoted but many are criticized as inappropriate for a retired investor. From my experience optional, dress causal, read every section of the paper, enjoy resorts Monday through Thursday, stay home on weekends. I have seen my portfolio more than triple during retirement. But I also know, from personal experience, the fears. Do I have enough? Am I diversified enough or too much? How can I stretch my money to last despite longevity, high tax rates, increasing medical expenses, and market crashes? How do I find advisors with actual retirement experience? Should I start looking for a part-time job? This book sets out the questions and provides the answers. And...it is a real bargain, less than the cost of a single small trade at most discount brokers. So join me on the journey.
17 of 18 people found the following review helpful
on February 12, 2001
Format: PaperbackVerified Purchase
A book that could potentially save you a ton of money--as it would have done for me had I implemented its strategy six months sooner than I did. As the title suggests, it's an excellen book for retirement planning, but it's also an invaluable overall investment management tool. Explains the importance of, and steps involved in, a form of asset allocation far superior to the stocks/bonds formulae we're used to. Pakced with useful information yet still a very enjoyable read. The Epilogue alone ("Living through a Crash without Putting a Bullett through Your Head") is worth way more than the price of the book.