The Bogleheads' Guide to Investing

The Bogleheads' Guide to Investing

Originally just the chat-line ruminations of Boglehead founder Taylor Larimore, and Morningstar forum leading cohorts Mel Lindauer and Michael LeBoeuf, their trusted advice has been brewed and distilled into an easy-to-use, need-to-know, no frills guide to building up your own financial well-being - so you can worry and profit more from the investments you make.

Invest like a Boglehead, and let their grassroots investment wisdom guide you down the path of long-term wealth creation and happiness, without all the worries and fuss of stock pickers and day traders.

If you face a financial crisis or problem, or simply want to know what is prudent to do with the money you save, the Bogleheads will have the answers you need to help you gain your financial footing and keep it.

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A Boglehead is an investor who follows the philosophy of Vanguard founder John Bogle. This book contains simple, honest, and wise financial advice based on that philosophy. Ive considered myself a Boglehead since 2008, when I stumbled upon the Bogleheads forum and moved my money into Vanguard funds. The Bogleheads tenants Choose a sound financial lifestyle. Use short or intermediate-term bond funds. Asset allocation Use life-cycle/target date funds, or copy them in building your portfolio.

Investing is about buying assets, holding them for long periods of time, and reaping the harvest years later. When evaluating funds for a taxable account, use Morningstars Tax-Cost Ratio calculator for the longest period available. Tax managed funds reduce shareholder taxes through methods such as: Low turnover Highest in, first out accounting Tax-loss harvesting Selecting low dividend paying stocks Holding securities for long-term gains Use redemption fees to discourage trading Many 401k plans have substantial and often hidden fees that are highly detrimental to the investor. It would be a good time to enlist the help of a good CPA to assist you with taxes, estate planning, insurance changes, and assess your overall financial well-being, etc. 3-- only buy coverage from the best rated insurance companies. Insurance is for protection and investing is for wealth-building. The only good purpose of insurance is to protect yourself from catastrophes you can't afford. Buy the longest period that you can afford and need. If you are under 65 and considering a high-deductible health insurance plan, you may want to consider establishing a health savings account for tax-deducted savings. Buy as much disability insurance as you think you'll need. Ideally, a good disability insurance policy will have: Covers your inability to work in your own occupation It requires a waiting period of no more than 90 days before coverage begins. Carries a cost of living adjustment Benefits are provided for partial disability Provides the longest benefit in your own occupation for as long as possible or at least until age 65 You need replacement cost homeowners or renters insurance. If you have a good healthcare plan you can skip coverage for medical payments too. Reduce the cost of homeowners, rental, and auto insurance by taking the largest possible deductible you can afford. If you are getting older getting long term care insurance can protect against the enormous cost of care in a nursing home. If you have extremely high net worth you can probably skip it and self-insure. Good qualities of a long-term care policy: Daily benefit should be equal to current daily cost of a nursing home in the area where you live. The policy is tax qualified, making the premium tax deductible and the benefits not subject to taxes. A good insurance agent can save you time and money and help you determine what types and amounts of coverage you may need.

One of the better introduction to investing books that I have read.

It covers the basics of everything from investment options and asset allocation to tax implications and how much insurance you should have.

It almost entirely describes my retirement strategy (the major difference being my use of Vanguard index ETFs over traditional Vanguard index funds, despite a buy-and-hold strategy), and is a must-read for anyone who wants to get serious about investing.

Reading The Millionaire Next Door was my first step to building a responsible financial lifestyle; The Bogleheads Guide to Investing took me to the next level. This review will be focussed on the last book, yet I recommend you to read The Millionaire Next Door before you read The Bogleheads Guide to Investing. The book is accessible for the layman, and comes with concise and clear explanations of common investment vehicles. What didn't I like about Bogleheads Guide to Investing?

I initially picked Burton Malkiel's classic, A Random Walk Down Wall Street but it proved to be too daunting and intimidating for a novice like myself, without even starting the book. I also had this book, The Bogleheads' Guide to Investing, which I picked up from the library to read after.

  • English

  • Economics

  • Rating: 4.26
  • Pages: 307
  • Publish Date: January 1st 2006 by John Wiley & Sons
  • Isbn10: 0471730335
  • Isbn13: 9780471730330