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24 of 25 people found the following review helpful:
3.0 out of 5 stars
Review by an ambivalent reader; website is a marketing trap, September 8, 2010
I bought the updated edition (Feb. 2010) from my local Costco store and read the entire book from cover to cover in two hours. (I have a background in investment, but currently unemployed.) I feel rather ambivalent about the author and the book.
On the one hand, I totally agree with his claim that the entire 401(k) system is corrupt, as is the entire investment management industry, and the U.S. government is a willing and active cohort in this scam to rob American employees of their retirement savings. My own 401(k) plans have seen paltry returns over the last 15 years, despite my effort at picking the "best" funds that were available to me. (No, I don't chase past year's performance.) Call me bitter, but from talking to my friends and former coworkers, this seems a commonplace experience, and this book explains why it's the case. The action chapters, esp. in part 3, are also decent, although as another reviewer has said, the entire action plan can be summarized in two sentences: diversify your portfolio, and only invest in low-cost index funds. The author does provide a list of funds to consider, although your plans may not offer them at all (see the "cheat sheet" in chap. 24 of the 2010 edition).
On the other hand, I'm not sure what the author's true motive in writing this book is. Is it really to help us worker bees to save for our (gloomy) retirement? As I was reading the book, I got the feeling that he was writing the book primary to sell the book, kind of doing what the mutual funds he criticizes are doing. For example, he cherry-picks on certain numbers, such as quoting historical returns without mentioning the significant inflationary effect of survivor bias (i.e., only companies that survive get included in calculating market returns).* He compares accumulative returns (using a 40-year horizon -- man, how many readers of this book have that many years to contribute to a 401(k) plan???) between a 2% expense ratio fund and a 0.3 expense ratio fund, but neglects to tell you that the difference is partially tempered by taxation. He does provide a bibliography, which is good, but who knows if he only picked the "research" that he agreed with and omitted anything that contradicts his belief?
The 2010 paperback edition also suffers from certain logic lapses, such as the first chapter about "Wan Ba Shi," as well as typos and grammatical errors.
One warning I should give is, the book's website appears to be mostly a marketing gimmick for his IFA products. I took the 25-question survey. At the end of the survey, I *HAD TO* give them my name, state, home *and* work phone numbers, and e-mail address, in order to see the survey results. The result page itself is titled "Investment policy statement" and contains numerous references to his IFA company and also contains a signature section for me to sign!!! Not a good thing, Mr. Solin, for someone who claims to be impartial and to expose a rigged system.
* He mentions the evil effect of survivorship bias in tabulating active manager returns, but nothing about it when it comes to calculating market returns.
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42 of 47 people found the following review helpful:
5.0 out of 5 stars
Financial Freedom Years Earlier, July 5, 2008
This review is from: The Smartest 401k Book You'll Ever Read: Maximize Your Retirement Savings...the Smart Way! (Hardcover)
Dan Solin's book, "The Smartest 401(k) Book You'll Ever Read", is a winner. His thesis is that investing should be simple, and he walks this talk by writing about investing in such a manner as to make it simple, fun, and easy to understand for the reader.
He offers far more than another book about how Wall Street and the insurance industry are ripping us off in our 401(k) and 403(b) retirement accounts. Though Mr. Solin does explain how our hard earned money is siphoned off by the "experts" that provide these plans, he also explains practical easy steps we can take to minimize the impact. These steps include:
* Using an IRA with better options.
* Rolling the 401(K) to the IRA when you leave an employer.
* Picking the "least bad" funds within a poor retirement plan.
* Choosing assets that fit with the rest of our nest egg.
* Joining the investment committee of our employer's plan.
Albert Einstein once said "if you can't explain it simply, you don't understand it well enough." Dan Solin gets it and explains it with brilliant simplicity!
If you want financial independence years earlier, "The Smartest 401(k) Book You'll Ever Read" is for you. It will give you sound and simple advice that's equally simple to implement.
For those who make their fortunes from providing these outrageously expensive plans, you'll hate this book. Read it anyway.
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25 of 31 people found the following review helpful:
5.0 out of 5 stars
Needed by Tens of Millions, July 14, 2008
This review is from: The Smartest 401k Book You'll Ever Read: Maximize Your Retirement Savings...the Smart Way! (Hardcover)
With tens of millions of Americans depending on the 401K, "The Smartest 401K Book You'll Ever Read" can help beginners or those who need to increase their knowledge of their 401K plans. With the 4-O-1 (with or without employer matching), the US worker today is on his/her own to understand, manage, and shift asset allocation as efficiently as possible. The 401 is littered with numerous problems that are a disadvantage to the worker. Part of this is because of the lack of Congressional laws. The investment industry is comprised of leeches that feed off of your investments throughout your 40+ years of work.
Author Dan Solin provides helpful and necessary information for those who are currently in a 401, who will be, and also those who'll be switching jobs. After leaving an employer there are a multitude of options of where to put your 401K money. Solin does note the latent gimmicks and tricks that take your hard-earned money in hidden fees.
Ten of millions of Americans are now relying on Defined Contribution Plans (401Ks) as Defined Benefit Pension plans (Pensions) are now nearly extinct. How much of your 401K will go toward your medical and pharmaceutical drug costs when you're old? Will the old rule of withdrawing 4% of your principle without eating into the principle be enough for you to live off of? Tax-deferred means - deferred - not tax free. Will Congress change the rules on taxes, again and again, as they so often have? What will the average rate of return per annum be? What will the average rate of inflation be? We must make a variety assumptions and calculations.
Solin's advice and info is critical because those with 401Ks are statistically putting all of their eggs into 1 Financial Market Basket. This, is 1 basket contrary to what is often advocated: "diversify." You're in mutual funds with an allocation of stock, bonds, and money markets, and yes you can diversify, but within your limited plan provided to your by your employer and fiduciary. Solin wisely promotes rolling over 401K retirement money in IRAs for more control and more choices. And this, can only be done, when an employee leaves a company. Is the solution to resign from a company - quit your job say, every 5 years, just to roll over your 401K? Obviously, not. (The Roth 401K was enacted in January, 2006.)
In addition to the 401K, non tax-deferred Index Funds provide the freedom of withdraw and movement with out penalty, limitations, age restrictions, and index funds also have low tax rates as there is less churning. In addition to this book by Solin, "The Great 401K Hoax" is worthy of a read. "The Smartest 401K Book You'll Ever Read" is an informative and important book by Dan Solin. Heavily recommended.
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