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.
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.
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.
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.
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.
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.