- Paperback: 176 pages
- Publisher: St. Martin's Griffin; 1st edition (January 10, 2001)
- Language: English
- ISBN-10: 031226321X
- ISBN-13: 978-0312263218
- Product Dimensions: 5.1 x 0.5 x 7.2 inches
- Shipping Weight: 4.2 ounces (View shipping rates and policies)
- Average Customer Review: 4.5 out of 5 stars See all reviews (48 customer reviews)
- Amazon Best Sellers Rank: #490,882 in Books (See Top 100 in Books)
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Fail-Safe Investing: Lifelong Financial Security in 30 Minutes Paperback – January 10, 2001
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If you had to summarize Fail-Safe Investing in three words, it would probably be these: Embrace the obvious. Look at your job, Browne advises. You get ahead because of your experience, education, and common sense. Your job is the reason you have money to invest in the first place. So the first of Browne's 17 rules is, "Build Your Wealth upon Your Career." Don't jeopardize your career; it's going to take many years of smart investing before your earnings will surpass what you earn at your day job--if they ever do.
The other rules aren't quite as obvious, but equally simple. Browne explains the difference between investing (making a long-term plan and sticking with it) and speculating (betting that you can beat the overall market during a specific period). He shows how life savings are easily lost when you borrow money to invest rather than investing only the money you already have. Browne also suggests a portfolio that he says is the simplest and safest possible for continual, steady returns above inflation: an equal division among stocks, bonds, gold, and cash. That covers an investor in times of prosperity (stocks), inflation (gold), deflation (bonds), and recession (cash). While many investment analysts would undoubtedly gag if you presented them with a portfolio that consisted of a 50 percent investment in gold and cash, Browne nonetheless makes a compelling argument that such an allocation makes it easier to sleep at night. And common sense tells you there are worse things than a good night's sleep. --Lou Schuler --This text refers to an out of print or unavailable edition of this title.
About the Author
Harry Browne (1933-2006) was one of America's best-known investment advisers, the author of a dozen investment and political books (including Why the Government Doesn't Work and How I Found Freedom in an Unfree World), a radio personality, and the 2000 Libertarian candidate for president. He lived in Tennessee.
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Top Customer Reviews
Speaking of his seventeen rules, the first five can be condensed into one simple rule: Forecasting = Fortune Telling. From Browne, we learn that no one can predict the future, yet many of us entrust our hard-earned money without any hesitation to modern day Gypsies- financial planners, emoneyf (mutual fund) managers and stockbrokers, who constantly tell us that they can predict the future using sophisticated eeconometricf forecasting tools. Browne reminds us that our wealth begins with what we earn, not with what we invest, and before we can invest, we have to earn. Although we can always borrow our way to bankruptcy with ease, we can borrow our way to prosperity only in our dreams. In the end, basing our earnings won through blood and sweat on the elaborate crystal-ball gazing of financial witch-doctors is the surest path to losses and total ruin.
Browne also delivers plain talk on risk, investment and speculation, and tells the reader that no one can ever hope to eliminate risk entirely. The best anyone can do is to develop realistic strategies for dealing with risk. As such, it becomes painfully clear that there is no such thing as a risk-free investment. This even includes for example so-called erisk-freef US Government Securities backed merely by the full faith and credit of the United States Government (I personally wonft think any less of the reader who laughs at that last sentence). Who knows what the future holds, and just because the worst-case scenario- a default or bankruptcy, has never happened does not necessarily mean that it can not happen tomorrow. In keeping with this, his thirteenth rule exhorts us to keep some assets outside of our native country, and is a brilliant touch. I had to laugh when I read the various calamities- natural and unnatural, which could befall our investments in our native country. However, one should keep in mind that such calamities can occur in ANY country. Also, holding some assets outside the US may not provide the secrecy or safety Browne says it will impart, simply because of the inter-connectedness of the global economy and the incredibly long reach of the US government.
At no point does the book let the reader off of the hook. We ultimately bear the responsibility for our investment decisions, and Mr. Browne is absolutely right when he says to never assume that what you have earned today can be easily earned tomorrow. Throughout the book, Mr. Browne wants to remind the reader of three things. First, it is hard to earn a dollar, yet even in the face of this generally accepted truism, there are those who want you to believe that you can get rich quick simply by making bets based on their uninformed, though highly elaborate, predictions about unpredictable events. Second, you know more than the so-called eexpertsf want you to think you know. The experts want you to disregard your common sense and put your trust in their opinion. Third, in the world of investing, what goes up eventually comes down, and even more important, what goes down does not necessarily have to go back up. As Browne pointedly remarks over and over again, in the world of investing, nothing is supposed to happen, and anything can happen. As such, the last five of his seventeen rules can be summarized as: Sophisticated = Stupid and Simple = Smart.
Finally, for those of us, including myself, who feel as if they have missed out on the Greatest Bull Market of All Time, fear not, for there will be other opportunities. After all, the last Greatest Bull Market of All Time occurred just before the Great Crash of 1929. As Browne tells the reader at the end of the book, you are not a failure if you missed the boat. To this I must add: You are not a failure if you missed the boat- especially if the boat was the Titanic! I think there are a lot of bruised and broken investors from the New Era Internet Boom (and subsequent Bust) that will wholeheartedly agree with me, as the last six years have been their figurative Titanic. These individuals especially need to read, and re-read this book as they invest going forward.
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Before reading this book, I was addicted to all kinds of financial pornography: books, newsletters, investment clubs etc. All of it was in search of the holy grail of investment knowledge...how to beat the market. Sometimes the stress of market volatility would keep me up at night. Then I met Harry Browne and his wisdom.
He makes a very strong case that no one can predict the future in financial markets. Even the cockiest fund managers typically perform poorly over the long run. So I asked myself: why am I wasting all this time and energy trying to beat the market? Isn't there a way to get the historical returns of stocks (about 10%/year) with little stress-inducing volatility or my most precious resource--time? Browne says yes...it's called the Permanent Portfolio.
It's like that rotisserie chicken oven on late night infomercials: "Just set it and forget it!" All of the economic environments are covered by Browne's Permanent Portfolio: inflation, deflation, prosperity, recession. No matter what people are worried about today, you're covered. You can let everyone else debate (because they don't know anyway). Browne's Portfolio has returned an average of 9.9% (roughly 5-6% over inflation) with extraordinarily low volatility for the last 40 years--which puts your mind at ease so you can go off and live life without worry.
That level of peace-of-mind has no value--it's priceless. I'll be forever indebted to Harry Browne for writing this book. I highly encourage you to read it and do a little research for yourself. I think you'll feel the same way.