Sunday, May 04, 2014

Review: If You Can: How Millenials Can Get Rich Slowly

If You Can is William Bernstein's financial planning booklet for people starting out in their careers. It is normally $0.99 at the Kindle Store (free today), but you can download it for free from Bernstein's website. At 27 pages long, it is short and can be read in a couple of hours. However, if you actually do do the homework in the book (which only of reading other financial books), the claim is that you will know more than most financial professionals about investing.

The prescriptions in the book are fairly straightforward: save money (at least 15% of your income), pay off all debt, invest in a diversified portfolio (the suggested 33% even splits between domestic stocks, international stocks, and bonds is a fairly good one), learn a bit about finance and financial history, rebalance your portfolio about once a year, steer away from financial professionals who will try to steal your money and only buy indexed funds (preferably Vanguard ones).

Of course, straightforward doesn't mean easy.  Being able to do all of these would qualify you to manage money not just for yourself, but for any one and any institution. Similarly, doing all of the homework assignments isn't easy, since it's actually substantial reading. Here's the reading list:
Bernstein carefully steers away from promoting his own books (which are very good), and leaves out several classics such as A Random Walk Down Wall Street , which are useful but also not as much fun reading as the above list.

In any case, the irony of all teaching is that the people who need it the most won't show up in class, hence the people who need this booklet the most probably won't read this book. But if you're the kind of person who gets asked for financial advice, in the interest of saving your time and your breath (since sadly, this type of advice is more frequently ignored than followed), this is a great little free booklet to point people at so you can talk about more interesting things.

Recommended.

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