Some family members are inheriting some stocks from a deceased uncle. Some of them have never had any investments before.
Uncle didn’t leave enough for them to retire and live on it, but I want to encourage them all to have something put aside for the future, and to get into a regular program of adding to it even if it’s only pennies a month.
So what is a good readable short book on: What is a broker?; Does a broker give advice?; Stocks vs Bonds vs Real Estate vs Insurance vs Funds (balanced funds, aggressive ones, conservative ones, foreign ones, index ones, etc); REITs, and why are they considered potentially dubious; tax considerations (for those with income of $21,000 a year, should they go for the tax-free, and why not); Effects of gov’t fiscal policy; Effects of inflation; How about using it for a down payment on a house; etc.
And: Scams to watch for; How to tell when a class or seminar might be a sales pitch; What not to do.
And for those who have mastered the elementary concepts, what’s a good secondary book that might advance their understanding.
I’m sure some more knowledgeable Dopers will come along with recommendations that will blow yer socks off - but I’ll float this thread for a bit:
How about The Automatic Millionaire by David Bach. It’s not the most in-depth thing you’ll ever read (although that can be a plus) - but what it does do very well is emphasize saving now. (Apologies for the ridiculous bolding and underlining - I’m in a mood).
It’s not going to give you all the answers to the questions you ask - but it just might get your family members putting aside a little money every month for the future.
There are a couple books from Economist Press that may be of interest to you: the Essential Investment (for an overview) and the Guide to Investment Strategy (for more information). If you’re not familiar with the magazine, take a look here for some background.
A classic, revised several times since the 60’s and probably in its gazillionth printing, is Burton G. Malkiel’s A Random Walk Down Wall Street; any copy is sufficient to get on the right track.
The most important factor - is getting into the habit of investing, and get into the habit early in age. Even small amounts of money invested regularly grow to astonishing sums - and folks who wait too long tend to try and compensate not by investing more, but swinging for the fences trying to make up for lost time. Bad Idea. An example of why time is the crucial factor - Suzie is 20, and invests 2000 dollars a year in the stock market, for ten years, and then quits investment altogether. Steve is already 30 - and invests 2000 dollars a year till he’s 65. Guess who has more money at retirement?
I’d recommend *The Truth About Money * by Ric Edelstein. However, I have also discovered something about all these books. Everyone who writes about money and investing, etc. has a particular point of view and an underlying philosophy about money and wealth and the economy and how it works and how it’s supposed to work and how our relationship to society is supposed to work, etc. All of that is part of the very big questions about what happens to a dollar when we spend it or save it, etc. And consequently, while you assume you are getting an impartial, encyclopedia type explanation to a basic question, i.e. what is a broke, you are actually getting ONE point of view on it. Granted, it may be a pretty impartial sounding one, but it actually isn’t impartial, it’s partial. It’s coming from someone with a particular point of view. It may be extreeeeemly subtle. But just keep in mind that everyone has a point of view. Therefore, even the book I’ve recommended, while very helpful, probably has a book out there that has a contrary point of view on some of the issues. Still and all, it’s a great place to start. I didn’t know what ANYthing was when I started reading it. Please just look it over. I bet it will help. Get it out of the library or look at it on the Barnes and Noble shelf. It’s really easy and helpful. xo, C.
