Armchair Millionaire, the [Paperback]

The book seeks to solve this problem by putting you into an investment plan that you can easily follow, spend small amounts of time on, and should give you superior investing rewards compared to most alternatives. The proposal is to put all the money you can into tax-deferred savings, pay yourself with automatic deductions ten percent of your after-tax earnings and invest it monthly on an automatic basis to get cost-averaging benefits, invest the money equally in S&P 500, Russell 2000, and the Morgan Stanley EAFE index funds, and start doing this today.

I have two basic problems with the book that caused me to grade it down a little. First, that exact mix of index funds isn't perfect for everyone. If you are fairly near retirement, you should be easing into money markets (see Charles Schwab's new book). If you are quite young, you should probably favor the Russell right now over the other two. Second, we have a market that is heading south very rapidly. By waiting a few weeks, you can probably get a much better deal on stocks. Although normally you should not try to time the market, when you are in the middle of a collapse, I would suggest waiting a bit to start. Many stocks could still fall another 50 percent. Why start out with large losses? So, if you start today, I'd say be heavy on money market funds of government securities.

If you have severe psychological hang-ups about money and investing, this book won't be heavy duty enough for you. If you are just open minded and ignorant, this book should be helpful.

I really liked the writing style. It is simple, direct, and filled with helpful metaphors. "Investing is a lot like buying a car." "As a consumer, you've got many choices but there's no such thing as the 'best' car for everyone." "[There's] only one that's right for you." " . . . [A] solid investment strategy is every bit as crucial as a car."

The book also offers the back-up of a web site where you can get advice from others who are further along with their investing. This can help you feel more confident at times like this when television is blaring bad economic and financial news. The book is enlivened and improved by many quotes from on-line comments and questions by investors.

The attitude you are encouraged to develop is one of setting a goal and then being a common sense, do-it-yourselfer in pursuing this through a plan of savings and investing that gives you the portfolio that will succeed. You are reminded that "even millionaires can spend their way into the poorhouse."

I thought that the best piece of advice in the book was to "take all the ideas you have about investing and throw them right out the window." Most inexperienced investors have very peculiar and incorrect ideas about investing. Consciously discarding those, while being skeptical, is a good approach as you seek better information. But remember, "your investing plan and your relationships will work only if you're going to stick together through ups and downs, for better and worse."

After you review this book, be sure that you do set explicit financial goals that you write out as a first step. Then, be sure you do develop a plan to meet those goals that avoids any unnecessary risk.

If you are a new investor, I would still like to see you read Rich Dad, Poor Dad and Common Sense on Mutual Funds before you finalize your plans.

May you develop the financial resources to meet your goals in a way that is comfortable and pleasant for you!

Instead, the authors promise to keep it simple and they do just that. It's tempting to want to ask, "what's new in this book." I think what's new is the fact that it's got an easy and proven plan to build a million dollar portfolio. Proven with the author's own money!

That's pretty good stuff for a $20 book.

The authors show great restraint by not dwelling on the gobs of investing science behind the Armchair Millionaire's Five Steps to Financial Freedom. In fact, there's enough Nobel prize winning research behind their method to choke a horse. They mention it along the way but avoid the temptation to bog you down in it. Instead, they stick to their own self-imposed line and keep it simple.

The risk of this is they can be called simplistic. The value, of course, is that they provide all the tools you need--and only those tools--to do-it-yourself. In other words, they'd rather you successfully start your own portfolio than convince you that they are smarter than everyone else. Rare indeed, these days.

My recommendation is to give this book to people you care about--People who you want to succeed. There's an old saying, you can lead a horse to water but you can't make them drink. This book is the water. It's got everything you need to build financial success for yourself. What you do with the information contained inside is up to you.

PS: This is my first book review--I finally felt I could say something that might help someone make a smart decision. Hope you like it!

I like how easy it is to read. It's funny, too. I also like that it has stories about real people and money. Mostly I like that the plan is really simple. Even though I don't have a lot of money and I don't know a lot about investing yet, I can start using the plan right away. I just need to pay off some little debts first, and the book helped me figure out how to do that too.

I live in a rural area so there aren't really any investment classes nearby. Nobody I know ever really talks about money, either. This book helped me learn more without any classes. I will definitely recommend this book to some of my friends who want to learn how to invest, too.

I haven't looked at the website yet. I hope it has even more good information.