Book Review – The Boggleheads Guide To Investing

The Boggleheads Guide To Investing Summary: The Bogleheads Guide to Investing is an interesting take on the philosophy and strategy of John C bogle the founder of the vanguard group. The overall concept of bogleheads is nothing outlandish or lavish, it is simply choose a sound financial lifestyle. Start early invest regularly, know what you are buying, preserve your buying power, keep costs and taxes low, diversify your portfolio.

Title:  The Boggleheads Guide To Investing Second Edition

Author: Taylor Larimore, Mel Lindauer, Michael LeBoeuf and John C. Bogle 

Publisher: John Wiley & Sons Inc              

Date Published: 2018

Subject: Financial & Investing

Pages: 336

About the authors: 

Mel Lindauer is one of the founders of the Bogleheads community and is called The prince of the Bogleheads by Jack Bogle.  Taylor Lairmore The King of the Bogleheads has spent his entire career in the world of finance and investments. Born in 1924 Taylor has seen many bull and bear markets and has an exceptional depth of knowledge which he drew upon in co-authoring this book. 

Michael LeBoeuf Internationally published author, consultant and professor 

The Boggleheads Guide To Investing PDF: No this book is not available for free download, you will be required to purchase the book.

Chapter Summary: 

Part I – Essentials of successful investing

Chapter 1: Choose a sound financial lifestyle

Chapter 2: Start early and invest regularly

Chapter 3:  Know what you’re buying: part one

Chapter 4: Know what you’re buying: part two

Chapter 5:  Preserve your buying power with inflation-protected bonds

Chapter 6:  How much do you need to save?

Chapter 7: Keep it simple

Chapter 8:  Asset allocation

Chapter 9:  Costs matter

Chapter 10:  Taxes: part one

Chapter 11: Taxes: part two

Chapter 12: Diversification

Chapter 13: Performance chasing and market timing are hazardous to your wealth

Chapter 14: Savvy ways to invest for college

Chapter 15: How to manage a windfall successfully

Chapter 16: Do you need an advisor

Part II – Follow-through strategies to keep you on target

Chapter 17: Track progress and rebalance when neccessary

Chapter 18: Tune out the “noise”

Chapter 19: Mastering your investments means mastering your emotions

Chapter 20: Making your money last longer than you do

Chapter 21: Protect your assets by being well-insured

Chapter 21: Passing it on when you pass on

Chapter 22: You can do it

The Boggleheads Guide To Investing Review:

The The Boggleheads Guide To Investing Book teaches us the basics of boglehead investing through looking at overall sound financial footing, getting started in investing, the different types of investments, investments which protect yourself against inflation, how to diversify and how to build a simple portfolio. 

There are some interesting concepts which are raised, and these seem to be a common theme across most passive income and personal wealth books, being to move away from the paycheck mentality and more to the net worth mentality.

People are not valued at the amount of money which is received in their paycheck, a doctor earning $20K a month may also be spending $21K a month on his lavish lifestyle. The better comparsion is via net worth, totaling up all your assets and deducting your liabilities.

I think the overall theme which the writers want to send across is similar to one person who made him self known to Jack Bogle in 2005, where he had never earnt more than $25K USD per year had accumulated his portfolio to $1.25M. This is the kind of slow, steady and continued investing which the writers say is the best. 

Another key theme common across these books is that you need to pay yourself first, if you wait untul you have a few extra dollar to invest, you will likely wait forever. Saving is key above all else. 

All three authors made poor decision which lost money, however it was the overall habit of faving and learning a solid investment strategy which make financia freedom a reality.

The book touches on concepts such as efficient market theory, and market portfolio theory, and I really enjoyed this analogy used by Burton Malkiel in 1973, which stated that the stock market direction is like a drunk standing in the middle of the road whose future movements can only be guessed. This sums it up in a very succinct and humerous manner. 

After 50 years in the stock market game, Jack Bogle has not found one person who can consistently pick the direction of the stock market. It simply is not possible and those who are saying they can do it are complexly wrong.  

So you can really see what the boglehead guide is about, there is no cheat code or way in which to predict the market, you just need to Start early invest regularly, know what you are buying, preserve your buying power, keep costs and taxes low, diversify your portfolio.

Diversification is very important generally it is thought to be 20-30 stocks and you have a diversified portfolio however William Bernstein suggests even 200 is not enough you need the whole market to truly minimize the risk.

Just for a moment think that someone went back to the past 12 months ago, and could tell what was going to happen to the stock market, would they be making allthis propaganda saying here is how the stock market will move? No they max out their loans and bet everything against what they know without telling anyone. 

To further this point, there was a boglehead contest where peoplw where invited to guess the market direction and index for a date 12 months in advice. It turned out that only 25% of bogleheads predicted the direction of the market.  Short story – no one knows where things are headed.

Make sure you grab a copy and check out the The Bogleheads’ Guide to Investing Larimore, Lindauer, LeBoeuf and Bogle. 

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