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The Only Investment Guide You’ll Ever Need

Andrew Tobias

By Jesse Kornbluth
Published: Jan 01, 2005
Category: Money

The title doesn’t lie.

I know because I met Andrew Tobias — dear Lord, was it really in 1964? — when we were college kids. I came back early in September to work on the literary magazine. Andy came back early to supervise sales of beer mugs and rentals of refrigerators. I spent money. He made money. And, more to the point, he saved it. And invested it. And got rich. (And has, dear guy that he is, probably given away more money than most of us will ever make.)

That I am thanked in the acknowledgements of this book is quite the irony — if not a rebuke. (My contribution: I told Andy about a D.H. Lawrence story involving money, and he quoted it to good effect.) The fact is, I have been getting copies of this book — free — every few years since it was first published in 1978. I know what Andrew Tobias recommends. Like most of his readers, I just don’t follow his advice.

And this is where Andrew Tobias is different from most writers who give financial advice — he is more concerned with what’s true than what’s pleasant. There are hundreds of people who will tell you how easy it is to amass a fortune in real estate, with no money down. They don’t demand discipline. Or sacrifice. To them, the world is a giant sundae, with a cherry on top. There it is — pluck it!

None of the easy path for Tobias. His precepts are clear. And simple. (Just hard to follow.) 1) Live below your means. 2) Save 10% of every dollar you earn. 3) Invest in the stock market via index funds. 4) Stay the course.

This is the sort of advice Warren Buffett would give you. But then Buffett, like Tobias, is an investor, not a speculator. He buys and holds. For entire decades. And because he chooses well — he looks for value, not headlines — the companies he chooses tends to go up. Not always dramatically. But steadily. And before you know it, he’s looking at real money. [Amazon is selling the paperback for $5.98. The Kindle edition is $3 more. Buy the paperback.]

In this economic environment — global uncertainty, a flat (and nervous) stock market, debt rising and inflation in the wings — we can pretty much forget about the huge gains of the ’90s. (They’re still around, but now they’re fees, and they’re only for investment bankers and others who make corporate mergers.) All the more reason you need the latest revision of this book.

Tobias goes deep into subjects and yet still is readable. (That alone is a feat.) He will tell you who benefits from a Roth IRA, why single people don’t need life insurance, why term trumps whole life, what to do if you hit the jackpot, how to approach stock research, why not to take product insurance when you buy an appliance, and much more. Along the way, he delivers lots of common-sense advice. For example….

Brokers: They’re on commission. Their job is to sell. Yours is not necessarily to buy. Use a discount broker.

Commodities: "Ninety per cent of those who play get burned. I submit that you have now read all you ever need to read about commodities."

Wine: Buy it by the case. Ditto toilet paper, napkins, paper towels and other staples.

Boats: "Do not buy a boat."

Gift-wrapping paper: Use the Wall Street Journal. Or New Yorker magazine covers.

In Tobiasland, the first thing you do is pay off credit card debt. Then you don’t respond to all the invitations you get for instant gratification. Then you start living a little less well than you might, in the interest of living better later. Un-American ideas, all of them. But if you don’t follow them, you’re looking down the barrel of what is reality for too many Americans: living from paycheck to paycheck, choked by debt, baffled by too many money-making schemes and not enough clarity.

Tobias has clarity to spare. "Happiness lies less in how much you have than in which way you’re headed," he writes. Yes, absolutely. And now, at last, I live that way. Took me only four decades. Don’t let it take you that long.