Customer Review

17 of 17 people found the following review helpful
5.0 out of 5 stars Take Control of your financial future!, 3 Sept. 2009
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This review is from: The Long and the Short of it: A Guide to Finance and Investment for Normally Intelligent People Who Aren't in the Industry (Paperback)
John Kay is an excellent writer - his books and columns are always fascinating and informative.

In this book he lays out a framework for thinking about how to invest for your long term future. It is not 'easy' reading but sure enough the content matter demands that it is treated seriously by the reader.

If you follow his advice I am confident you will be better off by a considerable amount within a decade - however this will take effort on the part of the reader and also a considerable amount of courage to take personal responsibility instead of relying heavily on institutions. This is a book to read several times to remind you of its key arguments. Foremost of these is that financial intermediaries are there to make money from you - if you can minimize use expensive financial tools, minimize fees and commissions you will be much better off due to the effects of compound interest. Essentially 2% difference of return year on year will lead to a big difference in the medium to long term future.

Some key ideas are:

* Do an audit of your financial service providers (current account, mortgage, credit card, savings account) every 2-3 years;
* Do not waste money on unnecessary insurance policies;
* Get rid of debt before saving (excluding mortgages);
* Aim for 8-10% compound growth rate;
* If you want to borrow then use your mortgage;
* Minimize fees and commission charges whenever possible;
* Seek to emulate the investment portfolio of pension fund managers;
* Use negative correlation analysis to create a stable portfolio.

I am 29 and have never previously thought much about savings and pensions - I now have a job where I can start to save so this book has come at the right time for me. If you are aged 25-45 you should read this book and try to act on it. It has been a real eye opener for me and I think in 2019 I will be a lot more comfortable for having read it. Good luck!
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