20 of 22 people found the following review helpful:
4.0 out of 5 stars
A financial planning book for the economic chaos., November 8, 2009
This review is from: Sustainable Wealth: Achieve Financial Security in a Volatile World of Debt and Consumption (Hardcover)
Axel Merk's Sustainable Wealth is a financial planning book for the Depression-like economic times. This book is a good introduction to sustaining whatever wealth you have left after your wealth was squashed by the economic collapse.
The highlights of this book were the following:
- How public policy is killing economy recovery.
- How social complacency and hubris lead to the slow downfall of the American economy
- Making the distinction between conventional wisdom and true wisdom.
- Getting a grip on one's expenses and debt and concentrate on building wealth.
This book reminds me of Kiyosaki's Rich Man, Poor Man from long ago as a financial planning book. Although it spends a considerable portion to the historical events leading up to the economic collapse and somewhat psycho-analyze why people did what they did that contributed to the economic collapse, This book ultimately focuses on modifying one's behavior to cope with the current economic conditions and build one' wealth.
The strength of this book is that it attacks conventional wisdom toward investing and stresses to be skeptical of current public policy that is targeted to fix the current economic problem. In other words, don't buy into conventional mainstream wisdom and don't rely on public policy to save you. It encourages to keep your eyes peeled to changes in the economic landscape, and consider various ways to preserve one's wealth. I am glad that this book targets conventional wisdom, complacency, and current public policy, all of which I thought were lacking in other gloom-and-doom books.
This book is quite concise, but it is a good intro to describing to the unsophisticated as to what is going on and what to do think and do next.
If you're the kind of person who bought a house two years ago, bought a brand new car, maybe took a home equity loan, ignored your chicken-little friend's warnings two years ago, slowly watched your net worth go into the red, now your chicken-little friend might have been right after all, and slowly realizing that your ship is nearly sunk, this book is probably for you. If you're having doubts that the economy is not as good as what the mainstream media is leading you to believe, this book is probably for you.
Help other customers find the most helpful reviews
Was this review helpful to you? Yes
No
41 of 50 people found the following review helpful:
1.0 out of 5 stars
One tired cliche after another, October 30, 2009
This review is from: Sustainable Wealth: Achieve Financial Security in a Volatile World of Debt and Consumption (Hardcover)
I have been looking for a way to transfer my money out of dollars into some other currency legally and easily which I thought would be addressed in Axel Merk's new book. He appeared on Fox Business News on Nov. 18 during which interview he advocated investing in a basket of foreign currencies such as the Euro, Swiss Franc, British Pound, etc.
Thinking a method to accomplish this would be described in detail in "Sustainable Wealth", I rushed to buy a copy. Alas, the book was crammed with endless cliches about invest wisely according to your own needs, be flexible, invest only what you can afford to lose and so on and on plowing old ground over and over. No mention was made on how to invest in foreign currencies, only that it was a good idea to do so.
Help other customers find the most helpful reviews
Was this review helpful to you? Yes
No
8 of 9 people found the following review helpful:
1.0 out of 5 stars
Good start, empty middle, bad end, August 1, 2010
This review is from: Sustainable Wealth: Achieve Financial Security in a Volatile World of Debt and Consumption (Hardcover)
At the beginning of the book Axel starts by offering some good education and current context for macroeconomics. I figured the rest of the book would flesh out some of the macro-economic issues and offer some solid advice on portfolio planning.
To the book's credit, it advocates:
- Reduction of personal debt
- The benefits of compounding on your savings (vs. the atrocious outcome of compounding against debt)
- Balanced portfolios
- Consideration that action at the extremes (like the current crisis) can even sink a well balanced portfolio - so you need to invest in safety.
- If people are getting over-confident (in stocks, in gold, in housing...) its time to buck conventional wisdom and get out.
But here's where I was very frustrated and upset by the book:
- The introductory parts had some very good information about the relationship of interest rates, borrowing, inflation, deflation, policy and so on (macro-economic stuff) but these ideas were not explored enough to take me anywhere close to a text book understanding of the concepts. My next book: Macro-Economics (the 101 kind).
- Merk feels it necessary to berate Obama's spending policies with claims that they are unproductive and will leave us with too much debt + the likelihood of inflation (an unsustainable condition). He has a key theme here on not spending beyond your means. However, it's impossible to form a valid argument saying that the current stimulus program was not effective. There is no control animal so there is no basis to say whether a different approach (or no approach) would have gone better. Any opinion on the matter is pure speculation.
- Near Merk's conclusion he talks about choosing gold vs. stocks for his kids' college savings. Despite gushing over the wonderful tax savings of a 529 (he says you should almost always jump on tax savings) he says he chose gold instead of a stock filled 529 because his portfolio was already over-weight on stocks. Huh? If you love gold, sell your stocks and buy gold for your own portfolio, then max out the 529 with stocks (or whatever they let you invest in) to get the tax savings.
- Merk suggests we all become masters of our own portfolios and study up on economic issues. I think its this kind of armchair quarterbacking that got so many "investors" in trouble in the last bubble and collapse. Same for the internet bubble. Everyone and their brother had their own idea about what stocks are best and where the "gold" is. As the book would content, everyone was too optimistic and complacent which is a sure sign of a bubble. So, its best that we all get humble and specifically avoid trying to become experts at all. Think a moment about the world's best experts today - they're divided on whether we will have inflation or deflation. If the experts can't agree (and thus many or most of them are wrong) then how can mere financial mortals make a good call? Its best we all have well balanced portfolios that can withstand economic pressures. The book should end with a reminder to get (mostly) out of debt (see next point) and shoot for a balanced portfolio. Then it should indicate what a balanced portfolio should look like in terms of currency, bonds, stocks and other investments.
- Getting out of net debt is different than getting out of debt, and being in debt may be better than being stuck with all your money in a single asset class like real estate. Imagine you have $100K and need to buy a $200K house. If you follow Merk's advice you would probably put down $100K and then pay down the other $100K as soon as possible so that you carry the least amount of debt and start to save as soon as possible. But then you have no financial flexibility in case of emergency AND all your assets are in one basket (your house). In 2003, you would have been better off putting in the necessary $40K down payment and putting the rest in gold (until now) or the stock market (until 2007). To put this in another time context, if you bought your house in 2007 (depending on your house's location in the country) you would see 35% to 65% of your principal go poof in 12 months - you would have been better with debt + cash on hand in order to buy a stock or another property come early 2009 when things had bottomed out). To illustrate further with consideration of net-debt... Imagine you need a $200K house and have $500K in savings. Should you spend $200K on the house and be left with $300K to save and invest? Or should you take out a $100K home equity loan or mortgage so you can invest it elsewhere? In today's market where interest rates are low, i would certainly argue that you take that bargain as a means to keep a portfolio balance in real estate (your house) which is < 1/5th real estate. Personally, I am about to take on additional home equity loans in order to invest in other real estate so that I can diversify my real estate holdings rather than be overweight in a single holding (my house).
In sum, the book should have gone deeper on the principles and more specific on investing strategies rather than hitting generalities nicely without enough substance, then going on with self congratulating stories that prop up Merk's authority by reminding the reader of his own lucky strategy with Gold (while failing to take advantage of 529 tax advantages) and lucky move to basically risk all his own assets to start a mutual fund.
If I had stopped reading at page 80, I probably would have loved this book.
Help other customers find the most helpful reviews
Was this review helpful to you? Yes
No
