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4.0 out of 5 stars
Valuable Concepts for New Investors, 19 May 2004
New research in Ordinary People, Extraordinary Wealth points out that people who are wealthy from investments in their 50s usually started by making individual investments of just a few hundred dollars. Ms. Dunnan's book is the first I have seen to frankly and thoroughly discuss how to acquire and apply those first increments for investing.Before waxing too poetic about this book (which is well written and conceptually very sound), I must point out a major flaw (the source of a 4 star rather than a 5 star rating). The book was poorly revised in this edition, and is filled with errors and questionable suggestions. I will list but a few. The National Association of Investors Corporation is listed as the National Association of Investment Clubs in all but one place (which it has not been for more than 14 years). You are encouraged to get stock in Brooklyn Union Gas in several places (which was renamed as KeySpan Energy several years ago, and is correctly identified only once by its current name). A safe corporate bond is listed that of Xerox (which has since teetered on the edge of bankruptcy). I could go on, but you get the idea. Sticking with the concepts (be sure you do your homework on applying the concepts, because you cannot trust the details here about the stock and bond markets in many places), this is a great book. The list of the 10 dumbest mistakes that people make about investing is worth the price of the book alone. The book is organized first around helping you acquire and safely hold $50. I agree with Ms. Dunnan that a credit union will often be your best bet. Then, she looks at where to put $500 once you have it. This section is pretty good until she gets to suggesting stocks. For most people, a money market account is a good bet until enough is acquired to get into a diversified stock portfolio through a mutual fund. See John Bogle's book, Common Sense About Mutual Funds, when you are ready for that research. The discussion of tax-deferred opportunities is good in the section on your first $1,000. The information about buying government bonds is good in the remainder of the book. The book could have been improved by putting the on-line URLs into the text, rather than concentrating them in on appendix. I recommend the Incredible Internet Guide to On-line Investing as a better resource to complement this book. Be sure to pay attention to the many hints and cautions in the book. They are uniformly good advice! Realizing that you should do all your own homework, I do hope you will buy, read, and apply this book's valuable way of thinking about investing. You will be well on your way to investment success if you do! Ask yourself where else an organized approach to getting started could make sense. What about exercise or weight control? Then see if you can find a common sense way to begin with appropriate steps that will build into a lifelong patterns of success. For weight control, I suggest you read Sugar Busters! and Good Fat, Bad Fat. Anyone should do better with weight control after understanding the important messages in those two books.
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