Book Review: The Only Investment Guide You’ll Ever Need

by Julie on July 27, 2011 · 19 comments

My 15 year-old newspaper clipping. Still relevant today.

Fifteen years ago I tore an article out of Parade Magazine. The title was How to Invest – The Smart Way and the author was Andrew Tobias.

I was intrigued by the author’s suggestion that a penny saved is actually two pennies earned.

The reason being that money saved isn’t taxed, while money earned is.

The article had a picture of Tobias inside a warehouse club with a full shopping cart full of canned goods.

The caption was a quote from Tobias:

“The IRS doesn’t tax you for smart shopping.”

That concept made such an impression on me that I still have that magazine clipping in a file of similar clippings in my desk drawer.

So when Money magazine recently featured Tobias, I again took notice. And I decided I had better buy his book. After all, it’s called The Only Investment Guide You’ll Ever Need.

The Only Investment Guide You’ll Ever Need

A lot of the advice Tobias was giving in 1996, he is still giving today. In fact, The Only Investment Guide You’ll Ever Need was first published in 1978, although it’s been updated eight times since then.

The book is divided into three sections, along with a number of appendixes that are a lot more interesting than your average book appendix.

Minimal Risk

The Minimal Risk section includes a chapter whose title may be the most attention-grabbing: Getting By on $165,000 a Year.

Why $165,000? The number is less important than the point Tobias is trying to make: that income is relative. For anyone who thinks they don’t make enough money to save, there’s another family that’s doing well on even less.

Other chapters in the Minimal Risk section include:

  • Trust No One (Including Murray from the Love Boat and the Beardstown Ladies of investment club fame.)
  • The Case for Cowardice (Otherwise known as the role that safe investments should play in your financial life.)
  • Tax Strategies (A pretty basic exploration of things like 529 plans, 401k’s, Roth IRA’s and giving money to charity.)

The Stock Market

The Stock Market section of Tobias’ book is spread over three chapters.

  • Meanwhile Down at the Track makes the case for investing a large part of your money in stocks.
  • Choosing (to ignore) Your Broker recommends managing your own money because you’ll care more and it will cost less.
  • And Hot Tips, Insider Information, and Other Fine Points is lots of short explanations of concepts and terms you’ll need to know in order to manage your own money.

Family Planning

Finally, the Family Planning section touches on all the family relationships as they relate to money: kids, parents, spouses.

It goes on to tell you how to manage your money if you inherit a million dollars — kind of like that game you play when you fantasize about winning the lottery — and how to manage it if you don’t.

Appendixes

I promised earlier that the appendixes in this book were interesting.

My favorite one is Earning 177% on Bordeaux (as in wine). A close second is Cocktail Party Financial Quips to Help You Feel Smug.

A word of caution, however. Tobias has strong political leanings and it’s never more obvious than in the appendix, A Few Words about the Budget, Taxes, and Our National Debt.

He’s not as outspoken in this book as I’ve seen him in other places — like on his blog — but you won’t have to guess which side he falls on.

His political ideas aren’t necessarily in line with my own, but I was able to easily set them aside. Still, if that kind of thing makes your blood pressure rise to dangerous levels, consider yourself forewarned.

Final Thoughts

There’s not a lot of new information in The Only Investment Guide You’ll Ever Need. Still, it’s helpful to hear good information repeated. And I like Tobias’ perspective.

And is it really the only investment guide you’ll ever need? Nah…you should read a lot of them. But this one is not a bad place to start.

Have you read Tobias’ book? What are your thoughts on his advice?

This post is part of Booking It @ Life As a Mom.






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Broke Professionals July 27, 2011 at 1:25 pm

I got the book from our friends of the library sale, but didn’t get a chance to read it yet. I started with the random walk down wall street, still reading that :) may be I should have started with a light book…

Julie July 27, 2011 at 1:28 pm

BP, A Random Walk is on my ‘to read’ list. Let me know how you like it. Is it still relevant?

No Debt MBA July 27, 2011 at 1:27 pm

I’m quite aware that a penny saved is worth far more than a penny earned. This became especially true once I was self employed and paying more in taxes. This motivates me to comparison shop and max out my retirement accounts .

Julie July 27, 2011 at 1:29 pm

Self-employment has a way of changing your perspective on a lot of things. :-)

Shannyn July 27, 2011 at 2:37 pm

“The number is less important than the point Tobias is trying to make: that income is relative. For anyone who thinks they don’t make enough money to save, there’s another family that’s doing well on even less.”

How true! As PF blogger who writes mainly for the younger 20-something crowd, driving this point home is tough. I’m going through David Bach’s books currently, and he echoes the same point, that it’s not how much you make, it’s what you save. Your habits (especially the bad ones it seems) just grow along with your income.

A friend of mine graduated a year ago, enrolled in an online college for his certification and was making good money while still in certification, working at a hospital. It was hilarious that he went from $12-13 an hour to $30 an hour but still ‘couldn’t afford’ to save or start a Roth IRA. I gave him a few books to read and laid out that excuses are like viruses, they just adapt and grow stronger- money wasn’t the problem, the habits around the money were, and in this case, procrastination and not reaching some “income ideal,” were keeping him from being realistic in the current day.

I think though- I’m making progress with him and with some of my readers…thank goodness! I’m putting this book on my list, thanks Julie!

Julie July 27, 2011 at 2:46 pm

Good points, Shannyn. A big part of making progress with your finances is avoiding lifestyle creep as you’ve described.

Christa July 27, 2011 at 4:53 pm

This book sounds great! That “How to Get By on $165,00″ is really eye-catching (don’t I wish, huh?), but I can see how his point could go from eye-catching to tips on how to live well at any income.

Amanda L Grossman August 3, 2011 at 2:29 pm

That grabbed me too–$165,000 is a huge amount of money!

Carla July 28, 2011 at 6:23 am

Haven’t read it, or even heard of it to be honest. But i’d sure like to “get by” on 165K! ;) lol!

I find that some of my favourite books, magazines, etc.. are the older ones. The advice was more practical & relevant usually!

Julie July 28, 2011 at 2:16 pm

Christa and Carla, That’s a killer chapter title,isn’t it? It sure gets a lot of attention.

Financial Success for Young Adults July 28, 2011 at 11:28 am

Looks like a good read. How did you save that clipping for so long?! lol

Julie July 28, 2011 at 2:12 pm

The real question is, how did I remember I had it? Crazy what kind of things my brain chooses to remember and what kinds of (important) things it lets go of!

Evan July 28, 2011 at 1:31 pm

I love checking out old investing articles and luckily my dad doesn’t throw anything away. He has magazines from the late 90s that scream “BUY TECH”

Is that old parade article similar? or is it more about frugality?

Julie July 28, 2011 at 2:11 pm

Evan, it’s more about frugality, money management and non-sexy investing and it’s definitely still relevant today. Here’s his recommendation: “A lifetime of periodic investing in no-load stock market mutual funds is the easiest, most prudent course for almost everyone.”

Denise @ The Single Saver August 2, 2011 at 12:24 pm

I have never read this book but now I am going to try to track down a copy!

Marie at FamilyMoneyValues August 7, 2011 at 9:37 pm

I picked up the old version at (you guessed it) a garage sale and am working my way through it. So far the rationale seems reasonable.

Julie August 8, 2011 at 9:47 am

Hope you find some good info in there, Marie. Good garage sale work!

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