Q32: Is there a book on this stuff?

Invest Your Way to Financial Freedom

By Ben Carlson and Robin Powell

Financial Freedom. We all have our own definition of what it means and it’s a position we’d all like to achieve. To some it means the ability to buy anything they want any time they want. To others, it means the freedom to not have to worry too much about money, about having enough to cover the lifestyle you want — with maybe a luxury or two now and then — free of the fear that you’ll run out of money before you run out of breath. Whatever it means to you, Invest Your Way to Financial Freedom can give you some direction on how to achieve financial freedom.

Readers of TMQ will be no strangers to the ideas presented in this book. Its two authors, Ben Carlson and Robin Powell, bring a great deal of expertise in investment and education to the table in this readable, enjoyable and usable handbook. Drawing from their careers and personal experience they present some cogent advice for how to begin and continue a path to financial independence.

Note that this is not a get-rich-quick guide: the title is “Invest Your Way to Financial Freedom”. And as we’ve said before investing is about creating and sticking to a plan which, with time and patience, will yield results in the long term. Carlson and Powell don’t make any outrageous promises about investment results except to point out that the power of compound interest working over the medium to long term, aided by regular small investments, is a simple recipe for investment success.

In 22 short chapters this book lays out a plan that anyone can follow. You don’t need to be rich to achieve your money goals, the authors say, just disciplined. And they don’t pretend that any of this is easy for young people today: the Introduction includes a paragraph entitled “The Bad News” where a future less privileged than their parents’ is eerily foretold. But the bad news gives way to good in the following chapters as the language of investments is demystified and the results of a methodical investment plan are laid out.

Stephen Hawking wrote that each equation he included in his book A Brief History of Time would halve its sales. Apparently sharing this view the authors show the mathematical results of saving and compounding, as well as the corrosive effects of fees, without resorting to terrifying equations. Readers are free to check the maths for themselves, but the results of time and discipline are undeniable. Some simple tables lay out the bones of how compounding can increase your wealth while you effectively watch idly from the sidelines. My only comment is that some readers might have liked to see these figures as charts to give a clear picture of the accelerating nature of compounded returns.

This isn’t a book full of investment tips. There are no “buy bitcoin now” suggestions or any encouragements to do other than simply diversify your portfolio with a low-fee investment fund and regularly chip in to your investment pool. The inevitable periods when markets fall — and, let’s face it, when you lose money — are not played down but rather presented as an opportunity to take advantage of the cost-averaging strategy of regular investing.

Following a strategy of simplicity and discipline, a strategy that we have long encouraged here, is presented as the most effective way to achieve your financial goals. Complicated, expensive and risky market plays don’t feature in this book which offers simple, achievable and effective investment strategy advice to readers of all ages.

“Invest Your Way to Financial Freedom” earns our high recommendation.

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