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18 of 21 people found the following review helpful
on June 3, 2014
Personal finance and investing is a crowded space in the publishing realm, and it's rare to find a book that has as much to offer as this one. It has originality, brutal honesty, and simple instructions about how to implement the underlying principles.

The authors do not suffer fools, and they call out some of the most deceptive and manipulative practices in the advice industry. They provide a roadmap of sorts - that is designed to steer investors away from the temptations that distract, distort, and confuse.

The book provides a detailed and thorough list of seven "Deadly Temptations" that are intentionally designed to create the impression that investing is extremely complicated and the only way to succeed is by hiring an expensive advisor who will tell you what to buy and sell.

For example, the authors explain in detail why it's a bad idea for amateur investors (as opposed to full time professionals) to try to beat the market. "You are extremely unlikely to find a manager, an advisor, or a strategy that will enable you to predictably beat the market. It will be even more difficult to know whether you have found one. It will certainly not be worth the cost to try."

Notice that they do not say that beating the market is impossible. They said that it's extremely unlikely, and it will carry a high cost to try. I would add that the few professionals who do manage to beat the market consistently, aren't likely to share their secrets with the world and thus create competition for themselves.

The cost of trying to beat the market is significant, both in terms of the amount of time it requires and the dues that must be paid as you move up the learning curve, making mistakes that form the foundation of your experience. It can be done, but as the book asks, is that really the wisest use of your finite resources?

The other six temptations are equally revealing, and together with the three rules, this book is loaded with valuable and practical advice.
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4 of 4 people found the following review helpful
on July 15, 2014
The authors provide convincing arguments that should push readers to a world of less stress, less complexity and some satisfaction in knowing that the prescribed simplification results in portfolios that, while not designed to beat the market, will beat the large majority of other potential portfolios when costs are considered. Ultimately it provides a blueprint for avoiding the unnecessary and large cost of most financial industry products.

There is a nice mix of proscriptive (e.g. don't do this) and prescriptive. It has good lessons, especially for someone new to investing. I don't recall any formulas or any significant math, just descriptions of the results of the math. This makes it easy to grasp. If there was one area where more could have been provided it would be how to allocate among the very simple instruments. Also, maybe an appendix showing how some of the results in the examples that were provided were calculated. For instance, there is an example showing the simple portfolio in action. Beth wants to guarantee some amount of cash flow and use the market for upside. But unfortunately the detailed how-to calculations are not included: "Either she or her advisor calculates that investing half her portfolio, 50%, in TIPS will secure that guarantee". I have not checked, but maybe detailed calculations exist on their website.
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7 of 8 people found the following review helpful
on June 6, 2014
Because the authors refute common assumptions on investing, people will either love this book or hate it. Those who prefer to keep their heads in the sand and are threatened by the challenge to traditional methods simply won't be fans. This is not a typical investing book! However, readers who want to challenge ideas, who have feel like the industry isn't set up to help them, or who are looking for clear answers are going to become passionate believers. If you fall into this category, "The 3 Simple Rules of Investing" will change your perspective on the industry and empower you to simply and easily take control of your personal finances.
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5 of 6 people found the following review helpful
on June 23, 2014
3 Simple Rules of Investing is exactly the kind of book I have needed to give my children in a few years. The actual investment plan is as simple as it should be, though the authors do throw in a few permutations for those who want (for whatever reason) a touch more complexity. The real meat of the book, however, is the 7 deadly myth section. I wish I had a book like this when I was fresh out of school and starting to save, as I feel like I came to each one of them individually, as an "a-ha" moment, and usually after wasting significant sums of money figuring them out. I was very lucky to have these myths debunked before I had a successful medical practice, or I would have been easy prey for the CFA's who continue to inundate my inbox. If this book had been around 10 years ago I wouldn't have needed any luck. If the financial crisis taught us anything, it's that there's something deeply wrong with the direction that the financial industry has been heading, and this book clearly explains how to avoid the pitfalls they've created. Follow their advice and your whole financial life becomes stress free and you can get back to focusing on what life's supposed to be about.
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4 of 5 people found the following review helpful
on July 21, 2014
As a professional investor that has consistently outperformed the market, I obviously don't agree with everything that was said. The markets can be beaten but that requires lots of full time effort, talent and sometimes luck; and one does not do so every day/month/year. That said, I haven't enjoyed [and respected] a book more. The arguments for their positions were cogent and compelling and actually changed my mind on an issue. Many, if not most, of the investing books I have read were not worth the time or money [even those written by friends]; this however is a definite must read. For someone who can't or simply doesn't wish to spend the time and effort to lean to do it themselves following these rules will work. I'm sending a copy to my children and telling them to read and heed. The views on this industry were a hoot, and so, so very true! I am actually looking forward to the next one.
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6 of 8 people found the following review helpful
on June 3, 2014
The 3 Simple Rules of Investing introduces an elegant solution for investing that works for everyone. The 2nd half of the book discredits seven investing myths that are the cornerstones of traditional financial investing. It strips an industry to it's core. Once these foundations are removed, all that's left is the easy answer they already gave you. You say, "It can't be that easy" this book shows you why it is and why it has to be.
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on March 29, 2015
Excellent book. I have read many books in investing and consider this one of the very informative. I do not necessarily follow exactly what they recommend (using only two classes of assets, Inflation protected treasuries and world equity stocks), but they do explain their reasoning and why many other alternative investment ideas are not worth pursuing. Like many other books, you can use what fits your own situation from the book. Perhaps the importance of the book is in explaining what some of things to avoid which is so critical to the average investor (as well as possibly institutional investors). By avoiding some major mistakes (they call those temptations to avoid), one can enhance his or her performance. Once I started reading, I could not stop. Very enjoyable read. Absolutely worth it. I even suggested to my son to read once in college level. I do not necessarily want him to copy what the authors say verbatim, but I hope he can learn enough to improve his investment performance.
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on June 3, 2015
If you are thinking of using a professional financial adviser, take an hour or two to read this book. The authors do an excellent job of explaining how you should invest, and most importantly why working with an adviser could cost you large sums of money. If you want more information I recommend reading Unconventional Success by David Swensen, or The Smartest Investment Book You'll Ever Read by Dan Solin.
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2 of 3 people found the following review helpful
on July 4, 2014
Here is a brief review from Professor Wade Pfau, whom I highly respect. In his blog,

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1 of 2 people found the following review helpful
on August 12, 2014
With all the smoke and mirrors, bells and whistles, chaos, frantic hand signals, and financial gurus spouting off at the mount, in the financial industry, it is very easy for an investor to become disoriented and dizzy in a blizzard of confusion.

The brilliantly simple and eminently sensible and easy to follow advice in this book is much like the rope that a farmer ties between his house and his barn, to enable him to find his way safely between the two buildings in a blizzard. Excellent guidance and very reassuring exposition.
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