Discover the Wealth Within You: A Financial Plan For Creating a Rich and Fulfilling Life (Paperback)

~ (Author) "Have you ever gotten into a cab but refused to tell the driver where you want to go?..." (more)
Key Phrases: negative average returns, tulip prices, stock slice, New York, Wall Street, South Dakota (more...)

Editorial Reviews

Amazon.com Review

Ric Edelman believes you can't create a truly effective personal finance plan until you really know what you want out of life. In Discover the Wealth Within You he shows how to develop a realistic series of individualized goals for your future, and then how to construct an investment program to help you realize them. Edelman, author of New York Times bestsellers Ordinary People, Extraordinary Wealth and The Truth About Money, draws on these books to explain why we're ultimately more successful with our financial agenda when we focus on it as a means to an array of unambiguous objectives (such as "see an event in person during the next Winter Olympics" or "have plastic surgery in three years") rather than vague long-range aspirations (like saving "for retirement" or to "buy a house"). In the first section he unveils a step-by-step process for determining the precise objectives that motivate us; in the second he points us toward a mutual-fund-based savings plan that should be easier to capitalize consistently because we know where it's taking us and when we'll get there. Incorporating a profusion of appropriate cartoon strips, inspirational testimonials, persuasive statistics, and an unusual assembly of footnotes that are as amusing as they are informative, Edelman offers a clear and innovative course of action that could turn even procrastinating wannabes into enthusiastic money managers. --Howard Rothman --This text refers to the Hardcover edition.

From Publishers Weekly

Personal finance specialist Edelman acknowledges up front that this is really two books in one. The first half aims squarely at readers of motivational self-help books, as the author exhorts readers to set exciting goals for themselves climbing mountains, collecting handbags that will inspire their quest for wealth. In the second half, he advises readers on investing in mutual funds, targeting his counsel toward those with at least some knowledge about the field. He attacks some common investing wisdom, particularly the value of Morningstar ratings and the advantages of index funds. Edelman painstakingly points out that he's criticizing the mutual fund industry's misuse of Morningstar ratings in advertisements, not the Chicago-based ratings agency itself. Fair enough, though his argument glosses over the point that ratings are helpful when used as one of many criteria to evaluate a fund. More troublingly, his dismissal of index funds stems from his premise that fees, including mutual fund loads, are the least important consideration in an investing decision. There is much good evidence to the contrary. Performance is unpredictable; fees aren't. Unlike his earlier blockbuster, Ordinary People, Extraordinary Wealth, Edelman's latest may strike a false chord with readers. On deadline, Edelman inserted some references to the terrorist attacks, apparently to compensate for the self-indulgent tone of the "goal statements" that clash with the newly sober national mood.
Copyright 2002 Cahners Business Information, Inc. --This text refers to the Hardcover edition.

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Product Details

• Paperback: 400 pages
• Publisher: Harper Paperbacks (April 1, 2003)
• Language: English
• ISBN-10: 0060008334
• ISBN-13: 978-0060008338
• Product Dimensions: 9.1 x 6 x 1.1 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 3.5 out of 5 stars  See all reviews (21 customer reviews)
• Amazon.com Sales Rank: #210,573 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

21 of 24 people found the following review helpful:

3.0 out of 5 stars Entertaining Guide on Life Goals and Selecting Investments, May 15, 2002

By	L. Masonson (Monroe, New York USA) - See all my reviews (REAL NAME)

This review is from: Discover the Wealth Within You: A Financial Plan for Creating a Rich and Fulfilling Life (Hardcover)

This is Ric Edelman's fourth HarperBusiness book on money and finance. Edelman's 400-page tome is divided into three parts:

I. Part I covers the pursuit of happiness and how to achieve your goals (122 pages)
II. Part II focuses on selecting the most appropriate investment vehicles (102 pages)
III. Part III reviews how to select the best mutual funds for your needs (123 pages)

Overall, the book is an enjoyable read and fully researched, although Part I could have been a book by itself. The layout is pleasing to the eye - numerous charts, cartoons, tables, lists, highlighted text, examples and anecdotes. Edelman supports his material with 219 footnotes (most are personal comments that should in the text rather than placed as footnotes on the bottom of the page) and 51 sourcing footnotes in the appendix.

In Part I, Edelman helps you create a list of goals by providing worksheets. Also provided is a list of questions, and activities to choose from that the reader is asked to fill in and select from, respectively, ranging from actions you'd like to do in your life to accomplishments to places and things you'd like to experience.

Edleman then covers how to achieve your goals by asking key questions. He provides insight on how to build a plan to achieve your goals and how much money is needed. He also covers the importance of not forgetting that long-term care insurance is critical.

In Part II, Edelman covers investments. He is a big fan of using the stock market to increase wealth because of the long-term positive returns, even considering the intervening bear markets. He believes that individuals that invest in cash equivalents (e.g., CDs, T-bills, and money market accounts) are harming themselves because of the ravages of inflation and the low total return compared to stocks.

Edleman provides an interesting table showing an investor's return from 1926 - 2000 based on the percentage of assets that are placed in stocks. For example, investing 0% of one's assets in the market resulted in an annual return of 5.4% (in bonds, for example). At 100% invested in stocks the annual return was 13.1%, and at 50% invested the annual return was 9.4%. Obviously, the higher percentage invested, the higher the annual return. Edelman further points out that over the last 100 years the market has gone up 70% of the time.

Edelman doesn't show 5-year periods or ten-year periods, so you cannot see the variance in different timeframes and the impact of bear markets. Over 74 years the market has gone up, but there have been 14 bear markets and some very severe ones including the most recent from the first quarter of 2000 to the current time. So, Edelman's table is not a true representation of the average investor's return. Interestingly, Edelman dismisses the current bear market as a normal bear market occurrence. This is hardly the case for many investors whose high-tech portfolios have been decimated between 50% - 90%. He does mention, later in the book, that a diversified portfolio would have softened the blow of the 2000 - 2001 bear market for many investors.

Edelman includes a chapter on why an investor should not invest in sector funds - you have to pick the right sector at the right time. He provides the performance of 13 sectors from 1984 to 2000 showing the variation in performance and the difficulty in picking the right sector.

There is another short chapter on the four ways you can buy your investments. He covers mutual funds, annuities, hiring an investment manager, and doing it yourself.

In Part III, Edelman spends 31 pages explaining Morningstar's star rating system, category rating, and style boxes. He believes that most investors pick their funds with the highest star ratings, but are disappointed when future performance is less than expected.
Edelman demonstrates that high star ratings do perform well in the future and shouldn't be used for predicting future returns. His long-winded explanation of Morningstar is a bit of overkill. Also, in early May the firm announced a change to their rating system to be implemented in the near future. So the value of this chapter may be minimal.

Edelman then spends 26 pages on how an investor should select mutual funds by understanding the principal of the standard deviation of different funds. He also provides a chart showing how long it takes to recover from different percentage losses (e.g., a fund losing 80% of its value will take 14 years to break-even assuming a 12% annual return). Edelman favors actively managed funds to index funds because, he says, that the latter haven't outperformed them.

Additional chapters in Part III cover how many funds do you need to be diversified, and active vs. passive management.

Edelman has strong opinions on how to invest. While I always don't agree with them, at least he presents his case with facts, statistics, and examples. Overall this book should provide the reader with useful insights into planning life's goals, enjoying them, and which investments to avoid in order to have the financial assets needed to live a good life.

14 of 15 people found the following review helpful:

5.0 out of 5 stars Awesome and Inspiring, October 30, 2003

By	Melody Cooke (Nashua, NH) - See all my reviews

This review is from: Discover the Wealth Within You: A Financial Plan for Creating a Rich and Fulfilling Life (Hardcover)

What a pleasure it is to read someone like Edelman who is not only uniquely qualified to write on the subject of money but also writes in such a breezely easy to read style.

I just picked up this book after reading "What You Need to Do Now" and "Ordinary People, Extraordinary Wealth" by Edelman. The previous books helped me more than anything to overcome the bad advice I got from reading other financial books.

Besides Ric's books, I also recommend "The Road to Wealth" and "The Laws of Money" by Suze Orman. I believe that Ric and Suze are the two best financial authors out there right now. Both are CFP's and Ric's firm is ranked among the top 5 firms in the country by Bloomberg. Obviously Edelman would not have this many clients if he didn't know what he was doing now would he?

10 of 11 people found the following review helpful:

5.0 out of 5 stars Clear, understandable and comphrehensive, December 3, 2003

By A Customer

Most financial books are boring at best and many times written by unqualified people. This new book by Ric Edelmen is like a fireside chat with a warm and funny advisor. Edelmen's writing style is clear and understandable and the material is comphrehensive and fresh.

In Discover The Wealth Within You, Ric Edelmen willt ake you on a journey to self discovery. Edelmen shows you how to choose fun, enriching and rewarding goals and gives you a simple straightforward plan to achieve them.

You'll discover that creating wealth isn't all that difficult, once you set the right goals. According to Ric Edelmen, all you need to do is decide what you want to do with your money. With enticing personal goals in place, you'll motivate, excite and suatain yourself in your quest for wealth.

After using Ric's worksheets to help you set goals properly, you'll embark on a detailed exploration of personal investing. You'll discover Ric's formula for creating a plan to achieve your goals, build your financial future and finance your dreams--all through his unique, time tested investing strategies.

By following Ric's plans and guidelines, you can achieve a healthy, balanced and richly rewarding life. Anyone can do it, says Ric, with the tools and techniques he provides.

Informative and entertaining, Discover The Wealth Within You is a must read in everyone's personal financial planning and investment libraries.