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on 31 January 2017
I found this book after following a link shared on twitter to an article penned by John Kay, who for many years, has been a financial journalist for the Financial Times in the UK.

It was described as a book for people not in the industry who want to increase their chances of having hard-earned savings and investments provide them with reasonable returns.

A large chunk of the book goes through financial theory on probabilities and risk and some in-depth descriptions of the leading ideologies formed in the last century. This section was a little dense but overall illuminating. If you're a money-nerd like me, and you'd have to be to buy this book, you'll be fine wading through this brain stretch.

This book is fantastic for someone who has started the journey to financial independence like me. As we can be a self-selecting cohort of people looking to do things differently this book is perfect. It gently nudges you through a side-door as the crowd rushes past. If you're looking for financial independence it makes no sense to be dependent on someone else to make investment decisions for you. This is the books strength. With wit and insight Kay challenges conventional practices in finance and gives his take on a better and more rewarding investments.
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on 7 February 2017
This second edition has updated a useful book. The first edition caused me to think differently and substantially improve my investing performance, read it slowly and digest. The average investor can be tens of thousands of pounds better off from a book such as this, ditch the financial advisor , cut costs and ride on the coattails of the professionals , to achieve above average performance for remarkably little effort.
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on 6 May 2015
This is an informative and helpful book for anyone wanting to manage their own investments. It takes you well beyond the normal chatter of the popular investment news. Although its approach to fundamental concerns is still valid I think a new edition is now needed. The recent changes to pension regulation, SIPP's and ISA's mean it is out of date. My other niggle would be that whilst it does its best to explain some complex economic models with the minimum of charts, the absense of any equations, and only a few simple tables, this does mean that it is more difficult to learn enough to apply the recommended thinking to actual portfolio planning. A drawback of a book like this is that it cannot give specific advice or recommendations even in a fairly general way without falling foul of the laws regulating the provision of financial advice. This is a necessary safeguard but makes the book less useful and the chapters on developing a portfolio a bit vague at times.
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on 3 September 2009
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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on 18 August 2017
This book was not an easy read for me. It is well written though, and very informative. It inspired me to look at the structure and combination of my investments. He does not promise to have a foolproof method of investing that makes me rich in a few years. Instead he gives some ideas how to cut costs of investments, how to ‘have realistic expectations, and how to look at risk and keep it to a reasonable level. It encouraged me to take responsibility of my money. I will continue to listen to the advice of experts and then use my own judgement, poor as it may be. It is good to keep on remembering that nobody has my own interest at heart like I do.
It was also important to me to have pointed out that every upturn has a downturn and that I, a small investor, also called a retail investor it seems, always know less than the insiders. My advantage is that I do not have to satisfy a boss nor do I have to be better than other investors. All I need to achieve is to reach my realistic goal of retaining the value of my investment and have a small increase. I recommend the book.
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on 5 October 2015
Great book. A bit repetitive sometimes but the main points are well worth repeating and are supported by industry examples. The book forces the reader to think as to what is really important for companies and for individuals. This is not a self-help genre book with cheap hard-hitting simplistic advice that no one will follow. Rather, we are in a world, as Kay points out, which is "objectives [are] multidimensional, and in which the evolution of objectives, states and actions [are] mutually supportive" (p. 44). The direct route is simplistic and ignores the complex interactions in the ecosystem of objectives and actions. As such, it is best to go 'obliquely' in pursuit of important goals so the ecosystem is not altered drastically. Btw, 'obliquely' does not 'deviously'.
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on 29 March 2017
Very Good read. Note: This book is not for completely fresh beginners to the financial industry. Some basic understanding is required. Overall, a very well written, entertaining, and insightful read.
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on 22 February 2018
Possibly the best self help book written on investment planning and practice for the induvidual. Easy to read and understand and carrying a very powerful message along with a clear explanation of how to avoid the traps and the charlatans and become a successful individual investor. I greatly enjoyed reading it and now keep it beside me as a reference work.
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on 22 July 2012
Far more than just an authoritative discourse on personal investing, this book throws considerable light on the whys of our present economic gloom. The author's understanding of the innards of the mechanism that drives our (Western) economy is formidable and he presents it with rare cohesion and persuasiveness. The structure of the material that makes its bulk is also carefully considered and well executed. The result is a book that works on a more than one level. It offers practical instruction and encourages one to trust one's own sense of understanding. But it also reveals many a dirty truth about banking. The closing chapter is the one politically most pertinent and as it happens, chillingly pessimistic. Yet in the view of current affairs, the pessimism seems perfectly fitting. The book was written in 2008. You'll find many of its propositions as well as the major strands of his analysis of the current banking crises closely reproduced in the pronouncements of those people who when they speak today strike you as forward thinking. It's then that you realise how privileged you are to have learned those truths at their source: from the man called John Kay. And if you are a budding investor, you'll probably be doubly grateful for having read this book. So, before you've even put its single lesson to use, you'll be a richer person.
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on 9 January 2013
A brief and affordable essay on how one cauld enter the frame of mind of how many apparently do think; and helpful in understanding how not to move temptingly and instinctively with the herd. Remeber how the vast herds of bison in early America were reduced to hundreds or the headlong migration of the Lemmings to oblivion?

For all of us imbued with the daily mountains of conflicting information (often highly partial and at worst misleading) it provides an amusing sideswipe and a jolt to be less emotional and taken in, and indeed be more focussed on what is behind the economic headline. A thoroughly enjoyable read. Take this book up when the next "plebs" episode is twisted into the media and relax with this witty antidote! You will not be dissappointed.
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