The Long and Short of It is a ‘must read’ if you are going to invest!
The follies of finance have threatened the stability of the global economy, and the world of finance has become increasingly complex and sophisticated, but also greedy, cynical and self-interested. The Long and the Short of It provides a guide to the complexities of modern finance and explains how to put your finances in the only hands you can confidently trust – your own. The Long and the Short of It will teach you everything you need to be your own investment manager. You will recognise your investment options, the institutions that try to sell them, and how to distinguish between fact and fiction in what companies say. You will discover the principles of sound investment and the research that supports these principles. Crucially, you will learn a practical investment strategy and how to implement it.
I feel that for if you are going to invest your money (which I assume you will be after reading my recommendations, Rich Dad Poor Dad and The Richest Man in Babylon), you should read this book first. I also strongly recommend that you read this book before you see a personal financial advisor.
As highlighted in the synopsis above, this book provides you with the information you need to ensure you make good investment choices. Too many people invest in individual stocks based on tips or bad advice – they are gambling, not investing. This book highlights what and why people who are looking to invest should do so simply and cheaply and will be a lot better off than most investors. The reason that you’ll do better is not because of some secret formula, it’s about eliminating the mistakes of others. Too many people pay high fees, try to time the market and are too concentrated. This book sets out how eliminating these factors is the way to be a successful investor.
I won’t lie, this wasn’t the easiest of reads.
The book took me on a roller coster of engagement. It started off really positively. I thought “this is going to be great, I like the way he thinks” (chapter 1). Then it got very technical and I thought “this is boring and reminds me of some of my lectures on finance at university” (chapters 2 to 7). Luckily it changed and I then thought “yes, I totally agree, this is what people should be reading” (second half of chapters 8 and 9).
I would strongly recommend you read chapters 1, 8 and 9 as a minimum. These chapters really get to the heart of what the author thinks most people need to know. Chapters 2 to 7 are technical and explain what different investments and risks are. Chapter 10 onwards goes beyond what I would feel comfortable doing – investing in single companies.
This book echoes a lot of what I believe – that the financial system is generally setup for the people involved to get rich, not the average retail investor (us!). Read more about my thoughts on this topic in my blog “What’s my issue with financial advisors?”
As I said earlier, I would strongly recommend people read this book before investing or seeking financial advice. Hopefully I will soon read a book which highlights some of these similar points but in an easier to read format.
What am I going to take from this book?
I plan to write a follow-up to my blog “Becoming a Rich Dad” where I will set out how I’m going that the advice from this book and put it into action – make sure you subscribe so you don’t miss it!
(Note: The book I read and reviewed was the UK version, I trust that the International version has the same chapters)
Thought provoking = 8 (out of 10)
Enjoyment of reading = 6 (out of 10)
Money making = 9 (out of 10)
Overall score = 7.92
Read again = Probably (although I did take good notes)
More information on the author (John Kay) can be found at www.johnkay.com