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The Lies About Money

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The Lies About Money

Achieving Financial Security and True Wealth by Avoiding the Lies Others Tell Us – and the Lies We Tell Ourselves

Free Press,

15 min read
10 take-aways
Text available

What's inside?

If you just know the truth about money, you can reduce your risk, lower your fees and improve your returns.

Editorial Rating

8

Qualities

  • Analytical
  • Scientific
  • Applicable

Recommendation

Financial adviser Ric Edelman outlines some sound principles of investing in simple, straightforward and accessible chapters. Anyone wondering about how to save and invest can benefit from reading his book, either because you’ll learn something new or because you’ll be reminded of old, true principles. However, some of Edelman’s recommended asset allocation strategies may be open to further discussion, even when studied in the light of the portfolio selection principles that he outlines in the book. getAbstract recommends paying very careful attention to Edelman’s solid chapters on financial basics, academic research, mutual fund abuses, and specific challenges such as saving for retirement, life insurance and income investing.

Summary

A Guide to Strategy

Investing isn’t about beating the market. If the markets fall but your investments fall less, you’ve beaten the market and still lost your money. Use your investments as tools. Keep these four factors in mind:

  1. Discipline – Have a regular savings plan and implement it with discipline. Save many different ways: Stop smoking, quit buying fancy coffee, drop some weight – all have financial benefits.
  2. Endurance – Play a long game. Investment success is a long-term deal. The S&P 500 grew some 8.4% yearly from 1996 to 2006, but 10 days accounted for almost 75% of the upside.
  3. Diversification – Diversify widely; have as many assets as possible in your portfolio. Hold all kinds of stocks and bonds, real estate, natural resources and other assets.
  4. Balance – Pay attention to your portfolio and rebalance it. From time to time, one or another asset class may grow to the point where it accounts for too much of your portfolio, or shrink to the point where its diversifying effect is negligible. Once you decide what percentage of your portfolio you want in each asset...

About the Author

Ric Edelman hosts The Ric Edelman Show on the ABC Radio Networks and writes a syndicated advice column. He heads a wealth management company and is also the author of The Truth about Money and Ordinary People, Extraordinary Wealth.

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