Ed Recommends: The Intelligent Investor

Ah another excellent book recommendation on my favorite subject - Investing!

Ed it looks like we have very similar tastes in books. That’s probably not surprising, seeing that I have a BS in Physics and an MSEE…

Though we are alike in that respect, we are very different in another - namely, I am 23 years older than you.

My investments have worked out well and I am thinking about retiring early. I have also become the local “go to” person that everyone I know comes to for answers to their investing questions. I’m not trying to brag, just trying to give a little background about myself so you know that what I am about to say is from someone who has “been there done that”.

Book knowledge that you get from Peter Lynch, Graham, John Bogle etc. is all very important but it is not the most important factor in investment success. By far, the most important thing is having the determination to stick with your savings plan. I mean, having the will to put away the necessary amount of money each and every month without fail.

This is not as easy as it sounds. If you have not yet been tempted to stop saving, then at some time in the future, you will be. It happens when a new life event occurs - i.e. a new house, or a new car, a new baby, etc. - and you say “I’ll stop contributing to my retirement account for just a little while, just until we get things under control again”.

You must understand that “just a little while” are weasel words. They make it sound like it’s no big deal.

Don’t do it. Once you stop contributing, it’s very hard to start back up again. Most people never do, until it’s too late.

Of course, I realize that sometimes a real catastrophe does happen to some people, and they are forced to not only stop saving but to also cash in their account. Sort of like the baddest of bad beats. But that kind of bad luck is relatively rare. Most people don’t really need to go that far.

So, to help deal with those temptations, I recommend George S. Clayson’s excellent little book “The Richest Man in Babylon”. This is basically a motivational book. It’s won’t teach you about stocks and bonds, or any of the specifics of investing - but by reminding you about the importance of saving, it helps you to stay the course. It was written in the 1920’s and everything in it is still just as true today as it ever was.

So, get this book and pull it out whenever any temptations come up that threaten to derail your savings program.

My apologies for the (long) length of this post - but I think this is a very important subject that is not really dealt with very much. Most people like to talk about “how-to” pick investments - but if you don’t have anything to invest, that doesn’t do you any good!

[...] then I came across Ed Miller’s recommendation of Benjamin Graham’s The Intelligent Investor, bought it, read it through, and came out a new person in regards to investments. I can only parrot [...]

[...] then I came across Ed Miller’s recommendation of Benjamin Graham’s The Intelligent Investor, bought it, read it through, and came out a new person in regards to investments. I can only parrot [...]