The Lies About Money (Hardcover)

by Ric Edelman (Author)

Editorial Reviews

From Publishers Weekly
Exposing the seamy underbelly of the retail mutual fund industry, this helpful primer by seasoned financial advisor Edelman offers step-by-step instructions for how to beat it at its own game. We have more to worry about than the ordinary fallibility of mutual fund managers, he explains; the entire industry has become flush with liars, crooks, and charlatans. Writing in a calm, well-reasoned manner, Edelman (Ordinary People, Extraordinary Wealth) explores basic concepts of portfolio management and retirement, and college and elder-care savings approaches. The book gets off to a slow start as Edelman works to ensure that less sophisticated readers are not passed by. After a sobering look at deceptive marketing practices, illegal market timing, late trading and excessive and hidden fees in the retail mutual fund sector, Edelman breaks down the options for ordinary people to regain their savings from crooked hands, in a detailed, interactive guide to portfolio selection. Edelman's clear writing and helpful advice are sure to win him a satisfied audience. (Oct. 2)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

Review
"Once again Ric Edelman has told investors the truth. Whether it's how to select an appropriate portfolio, invest for college, or recognize practices that are not in the investor's best interest, Ric arms investors with information they can use to make wise investment decisions and protect their assets. And he does it with wit and enthusiasm. Read The Lies About Money. You won't be disappointed."

--Don M. Blandin, president and CEO, Investor Protection Trust

"This is a thriller, a real page-turner! Imagine one of America's biggest, most successful financial advisors sells all his own retail mutual funds. Why? I couldn't put it down, had to find out more! If I sell mine, then what? You'll love Ric's solution. The Lies About Money is a must-read thriller...if you want to retire rich!"

--Paul B. Farrell, JD, PhD, columnist, DowJones/ MarketWatch and author of The Lazy Person's Guide to Investing, The Millionaire Meditation, and Zen Millionaire

"Just when you thought the financial waters were safe, Ric Edelman shows that the mutual fund industry is like a shark waiting to be fed, and why you should be afraid, very afraid. But after reading The Lies About Money, you won't have to be afraid anymore."

--Donald J. Farish, president, Rowan University

"Once again, Ric Edelman comes to the aid of investors everywhere. His new book is clearly written -- informative and entertaining -- and will be of great use to both novices and experts. His thought-provoking ideas are a refreshing challenge to conventional thinking, and you owe it to yourself to read The Lies About Money."

~Richard J. Koreto, editor in chief, Wealth Manager magazine

"If you're an independent-minded investor, don't miss this book. In it, Ric helps you understand how to build a low-cost, unique and diversified long-term investment portfolio based on your personal needs and goals -- and he does it in plain English."

--Joe Moglia, CEO, TD AMERITRADE

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Product Details

• Hardcover: 336 pages
• Publisher: Free Press (September 1, 2007)
• Language: English
• ISBN-10: 1416543112
• ISBN-13: 978-1416543114
• Product Dimensions: 9.6 x 7.9 x 1.2 inches
• Shipping Weight: 1.4 pounds (View shipping rates and policies)
• Average Customer Review: 3.1 out of 5 stars See all reviews (36 customer reviews)
• Amazon.com Sales Rank: #83,965 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

283 of 301 people found the following review helpful:

2.0 out of 5 stars Don't waste your money on this book - buy Bogle's!!, October 3, 2007

By	bookman99 "bookman99" (USA) - See all my reviews

I was really looking forward to this book, as I have read Edelman's previous books and enjoyed them. This book is not a comprehensive how-to guide concerning personal finance, but rather, it is a book written to justify a sea change in Edelman's investment philosophy. The main theme of the book is simple: Mutual fund companies are ripping you off with hidden fees, high expenses and shady dealings. To anyone with a pulse, this should not come as a surprise. John Bogle pointed this fact out 15 years ago, and he has been shouting it from the mountain tops without pausing to take a breath ever since. Anyway, Edelman has apparently FINALLY, after all these years, realized what was going on right in front of his face the entire time. I don't know about you, but a smart guy should have understood this situation within five minutes of opening a financial practice! It does make one question his credibility. I hope this doesn't sound like I'm talking down to him, because I think he really is a very intelligent man who wants to help his clients. I just think he's too caught up in his own version of the world.

The way I see it, Edelman has been attacking index funds viciously for decades. He has used perjoratives such as "I hate index funds" from the beginning of his career. Now, he is an indexer in disguise. He refuses to outright endorse the indexing concept, but even a glance at this book will prove he believes in buying almost all the stocks in a given sector and holding them long term without virtually making any changes to the mix. Now, where I'm from, THAT IS INDEXING. I don't care how you dress it up, the guy has recognized the folly of active management. What's more, investigate DFA, the fund company he now endorses. DFA's own marketing materials preach the virtues of their investment approach - indexing!! (Note: They do create their own indexes. But they are remarkably similar to the popular indexes used by Vanguard, et. al.) Also, DFA mandates a fee paid to a planner for almost all DFA investors coupled with higher expense ratios than Vanguard funds. Their stated improvements on the commercial indexes are nullified by these extra costs. Remember, costs come from your bottom line no matter what any financial services firm may tell you!

And what are ETFs, something Edelman is now very enthusiastic about? They are indexed investments sold as securities on the exchanges! I believe Edelman is secretly a passionate indexer, however, he can't bring himself to say, "Folks, I messed up big time. You really can't beat the indexes. As a matter of fact it is mathematically impossible to do so."

One last thing that irritates me about this book. Edelman writes that fees are immaterial if the results are rewarding. How can he say this? When indexing, everything else is equal except for the costs! The more fees you pay, the poorer your indexed investments perform. The reality is Edelman is still a fee-based planner. He MUST MUST MUST justify these fees. They have made him a multimillionaire, and he can't live without them. This small part of his book makes me wonder about his objectivity.

The bottom line is this: save your money and buy John Bogle's lastest book, "The Little Book of Common Sense Investing". Bogle has been consistent and right on target since publishing his very first book. Plus, Bogle will prove to you that Edelman's advice is flawed. Bogle's writing is elegantly simple, and his solutions are fundamentally sound. When comparing the two books, Edelman looks like the Bogle wannabe who still hasn't mastered his guru's teachings. All in good time, Mr. Edelman, all in good time.

40 of 41 people found the following review helpful:

3.0 out of 5 stars Mixed bag, October 14, 2007

By	L. Rohrer - See all my reviews (REAL NAME)

This book makes some good points:

Pay off credit card debt and establish cash reserves before investing
Save to the max that you can afford
Invest for the long term - you need to be in the market all the time
Diversify your assets
Rebalance periodically
Risk is as important as return
Tailor your portfolio for your situation
Don't invest in "hot" tips
Move your 401(k) to an IRA when leaving your job - don't cash out
Life insurance is not an investment
Variable annuities can be good for some people (very few situations)
Don't let taxes dictate your investment moves
Be realistic about how much you will need in retirement
Assume modest retruns when calculating how you might have in the future

However, there are also some bad ideas:

Sell ALL your retail mutual funds and buy EFTs and/or institutional funds. EFTs have a place, but if you are investing small amounts of money often, commissions will eat you alive. Also, the always updated pricing may encourage rapid trading. The institutional funds he refers to are not readily available unless you use an advisor.

Place ALL your 401(k) money in stock mutual funds. Maybe good advice for some, but certainly not all people, especially those near retirement, and those who might panic when the stock market crashes.

Never let expenses determine your investment strategy. Of course, every investment has fees, but indexing has the lowest fees, and you can diversify using indexes on the cheap.

Edelman provides 43 poortfolios in this book. To figure out the right one for you, you have page through the book, and to find the starting point, you have to go to chapter 7, page 193. Confusing. Also, some of the 43 portfolios are very similar, with only 1 or 2 percentage points difference in one or two categories. I think he could have done with fewer portfolios.

Edelman blasts mutual funds, providing 25 problems with them. He also provides a 41 page mutual fund scandal timeline. This overkill, with day-by-day facts. He could have made his point in far fewer pages. As I said above, his alternatives are no holy grail, particularly for investors just starting out.

There are also many references to his other books, should you want learn more about certain topics.

In many regards, a decent book, but the advice not usable by everyone.

34 of 37 people found the following review helpful:

1.0 out of 5 stars Disappointing, October 18, 2007

By	T&D (TX - United States) - See all my reviews

Based on the hype via radio ads, I had high hopes for this book but, sadly, I was disappointed.

Granted, I purchased this book primarily for the asset allocation portfolios. However, the portfolio allocation information is on Edelman's web site. The book even notes that the trail to the right portfolio is covered more in depth on his web site. So if you're considering purchasing the book just for the portfolio asset allocation information, check out his web site.

The system to get you to the "right" allocation model is cheesey. A flow chart would have fit on a couple of pages. However, Edelman has the flow chart spread out over some 60 pages. Granted you won't need all of those 60 pages for your personal chart. However, it reminded me of grade school to have to flip backwards and forward through the book to find the next question.

The sales pitch for a financial advisor is there. The pitch to use a specific fund company is there. And guess what? To use the recommended fund company you need to go through his firm.

Plenty of mutual fund bashing. In fact there are 40 pages of mutual fund "scandals" enumerated. I got his point in one page. The rest is what I would consider "filler" material.

A few good points are made. Start early, stay invested, rebalance regularly.

Mark me as "very under-impressed".