The Rules for Growing Rich : Making Money in the New Information Economy [Hardcover]

David Lereah (Author)

Book Description

Publication Date: June 27, 2000

Today's new information economy has generated unprecedented opportunities for investors. But taking advantage of them requires discipline and a knowledge of econimic trends. There will be recessions and bear markets. There will be recovery periods from recessions. And there will be future bull markets. How does one make sense of these changing economic conditions and make the right investment decisions? Dr. David Lereah shows how the experts do it, and how you can, too.

With the advent of the Internet, ordinary investors now have access to the kind of information traditionally available only to investing professionals. Dr. Lereah levels the playing field by providing investors with the analytical tools they need to really take advantage of that raw information. This accessible format makes the ideas easy to understand and provides bite-sized, practical steps to take based on which way the market is going. Dr. Lereah's practical guide helps investors navigate the peaks and valleys by using the Internet to easily monitor a wide range of economic and investment data -- from inflation and interest rates to price/earnings ratios-- and then managing your portfolio accordingly.

In part one of The Rules for Growing Rich, Dr. Lereah shows how to be a smart consumer of economic and financial information, including:
-- How to identify business cycles
-- The eight most influential economic reports that you should monitor on a regular basis
-- How the Federal Reserve, market psychology, changing demographics, and other factors influence the investing climate

Then Dr. Lereah shows how to put all of this information together in 168 rules for maximizing your portfolio.
-- 63 rules for investing in stocks
-- 37 rules for investing in bonds
-- 23 rules for investing in real estate
-- 10 rules for investing in options and futures
-- 17 rules for international investing
-- 18 rules for retirement investing

With these rules, investors gain a much clearer understanding of the financial markets and can make profitable investments by more accurately anticipating whether the economy is headed for recession, recovery, or expansion. This is not a book for those who want to make a killing in a day but for those who want to develop a serious, ongoing investment strategy using the clues available about the direction the economy will take in the future.

Editorial Reviews

Amazon.com Review

The Rules for Growing Rich, David Lereah's manual for "Making Money in the New Information Economy," is a sophisticated compilation of tools and suggestions for tackling today's high-tech world of finance. All investors, writes Lereah, chief economist for the Mortgage Bankers Association, now "have almost instantaneous access to an abundance of investment data once available only to professional investors. Understanding how to sort, interpret and evaluate this information is critical in developing successful investment strategies." He subsequently offers authoritative advice on formulating such tactics and applying them in any economic scenario. Lereah begins with solid advice on monitoring the overall economy via cyberspace, pointing out the potential significance of interest rates, employment reports, and other business-cycle indicators (and noting, in each case, online sites that follow them). He then focuses on individual instruments used to act upon this information--stocks, bonds, real estate, options, futures, and international assets--along with investment principles to apply in good times and bad. These 201 resultant rules offer specific guidance for assorted situations, incorporating variables such as housing starts, durable goods orders, and the other regular reports discussed in the preceding section. There is a wealth of counsel here for diligent long-term investors who put in the time necessary to absorb it. --Howard Rothman

From Publishers Weekly

The current booming economy has led many investors to mistakenly believe that making a million requires only plowing money into Internet-related stocks. In fact, argues Lereah, chief economist at the Mortgage Bankers Association, when the boom ends and the stock market falls precipitously, investors will need a firm grasp of economic trends, government policy, interest rates and other financial principles to maintain adequate returns on their investments. His book helps readers prepare for the future by offering "a structure for organizing and interpreting" the boundless financial information available online. Designed particularly for those who want to learn to use the Internet in managing their investments, this volume carefully explains the principles of stocks, bonds, real estate and other profit strategies. The accessible overview of economic trends and financial reporting is interspersed with occasionally obvious investment rules (e.g., Lereah advises investing in health-related stocks because baby boomers are aging and will be spending more on health care). Overall, this book is a good primer, best for readers with little experience in investing who need help sorting through all the professional data now available to amateurs online. Agent, Alice Martell. (July)
Copyright 2000 Reed Business Information, Inc.

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Product Details

• Hardcover: 320 pages
• Publisher: Crown Business; 1 edition (June 27, 2000)
• Language: English
• ISBN-10: 0812930568
• ISBN-13: 978-0812930566
• Product Dimensions: 9.4 x 6.2 x 1.1 inches
• Shipping Weight: 1.1 pounds
• Average Customer Review: 2.9 out of 5 stars  See all reviews (7 customer reviews)
• Amazon Best Sellers Rank: #2,664,819 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

11 of 11 people found the following review helpful:

1.0 out of 5 stars VERY BAD, March 5, 2007

By 

Vincent Fox "Vincent" (Atlanta, GA USA) - See all my reviews
(REAL NAME)   

This review is from: The Rules for Growing Rich : Making Money in the New Information Economy (Hardcover)

Rah rah rah! Bull markets never end and you can get rich too!

Yeah, this is the same David LeReah who is the spin-meister for the National Association of Realtors.

His primary role seems to be keeping the band playing on the aft-deck, to keep your mind off the reality that the ship is sinking. He did it in this book, as the beginning of the Dot-Bust started. Now he's doing it again for the Housing Bubble Burst.

11 of 12 people found the following review helpful:

2.0 out of 5 stars An Economist's View of Investment Timing, January 14, 2001

By 

Donald Mitchell "Jesus Loves You!" (Thanks for Providing My Reviews over 109,000 Helpful Votes Globally) - See all my reviews
(VINE VOICE)    (HALL OF FAME REVIEWER)    (TOP 100 REVIEWER)   

This review is from: The Rules for Growing Rich : Making Money in the New Information Economy (Hardcover)

This book has three problems. The first is the premise that rich investors should be changing investments all the time in response to shifts in economic conditions. That is probably the way that fewer people get rich than any other. The second is that you can rely on economic information as it comes out to tell you how the economy is shifting. With revisions and changes in measurements, you usually can only confirm a shift when it is long over. The third weakness is a virtually unlimited faith in Internet related stocks that would have had you buying and holding leaders at the price peak in 2000, and subsequently losing over 80 plus percent of your money. Avoid this book as a investment guide for anything but commercial real estate.

This book's purpose is to "help investors make the connection among the Internet, the economy, and investments." Where the book succeeds is in identifying the places where you can get information on the Internet about economic conditions and investments. But there are better books for this purpose, so that is not enough of a reason to buy the book.

Dr. Lereah states that successful investing is based on these rules: "Utilize your knowledge of the economy with Internet-driven investments, information, and understand historical economic relationships."

Basically, the philosophy is "buy and hold" for Internet stocks and shift in and out of all other classes of investments. That's just the opposite of what you should be doing. Very few investors should be trying to time stock and bond investments. The track record of professional investors (who do look at this sort of information) is very sorry. Over long time periods, less than 15 percent can beat the market averages. I suggest you read John Bogle's Common Sense on Mutual Funds to see the folly of Dr. Lereah's approach.

Internet stocks are usually ridiculously overpriced, so buying and holding is a tough way to make money. These are great trading stocks on the way up, and even better stocks to sell short when the bubble bursts. Even after Internet stocks have been devastated (like now), they are still overpriced in every case I can find.

Some of the book's rules do make sense, such as the idea of having goals. But because the book covers so much ground, the subject is reviewed in such a few words that you don't get enough advice about how to do this. On the good subjects, you will feel like you are covering 123 cities in Europe in 15 days. You will see something, but your head will spin from information overload, and you will not quite understand what you are seeing as a result.

What you can use this book for is buying and selling commercial real estate. Economic conditions are very critical in that area. As a mortgage economist, obviously Dr. Lereah should know that area and his advice is sound.

My suggestion is that you use the occasion of reading this review to consider whether you have set appropriate financial goals for yourself. If you have not, certainly do that before seeking financial advice from investment books, Internet resources, or financial advisors.

Learn that the keys to wealth begin with appropriate financial goals.

11 of 13 people found the following review helpful:

2.0 out of 5 stars Wrong title, wrong size, August 16, 2000

By 

Damian (Montevideo, Uruguay) - See all my reviews

This review is from: The Rules for Growing Rich : Making Money in the New Information Economy (Hardcover)

This is not a book for growing rich, it only explains some basics of the US economy. The author repeats itself too much, maybe it could have been a better book if it had less than 100 pages and not 300