Readers of this blog are likely familiar with the Oblivious Investor blog. Its author, Mike Piper, is a frequent commenter here. (He signs as ObliviousInvestor. It’s an SEO thing.) And it’s been on my blogroll for a long while now.
So, naturally, when Mike put out a book version of his blog, Oblivious Investing: Building Wealth by Ignoring the Noise
, he bravely sent me a
free copy in the hopes that I would say something nice about it. You have to admire his courage. I rarely say nice things.
I was a little worried myself, but truthfully I have only two significant problems with this work.
1) It takes the form of a fictional narrative, which I find annoying.
2) It doesn’t fully explore some topics that I think are interesting.
In other words, it’s not written the way I would have written it, and that’s an objection I have to almost everything.
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When I started this blog I planned to occasionally point out good articles and posts as well as criticize the bad ones. So far, I’ve done it so infrequently it can’t even be called occasional. There’s just so much bad stuff out there.
But last week SmartMoney had a pretty good item on the fuzzy math of retirement. The math in question is basic stuff: how much you need to save, 
how much you can expect to draw from your savings each year in retirement, and so on. But here I mean basic in the sense of being fundamental, not in the sense of being simple or easy.
Nevertheless, as the SmartMoney piece points out, until recently a person visiting their friendly neighborhood financial planner or broker might have gotten the impression that these were simple questions with simple answers. Your investments will appreciate X%. You can safely withdraw Y% from your savings each year. When all was going well and the market was (mostly) going up, from where those numbers came and how useful they were didn’t seem like important questions.
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This is the last in my five part discussion of Dave Ramsey’s Seven Baby Steps. (I kicked it off here, and then discussed Step 2, Step 4, and Step 6.) In this post I will tackle Ramsey’s final step, number 7, in which you are instructed to continue to build wealth using equity mutual funds and real estate and to share your bounty with others.
In some ways this is the least substantive of Ramsey’s steps. It is the “and they lived happily ever after” step, as much a carrot to inspire those working their way through the earlier parts of the program as it is a practical set of instructions. But it does provide an excuse to revisit Ramsey’s investment philosophy.
Ramsey is consistent in his aversion to debt. You might call him Shakespearian. “Neither a borrower nor a lender be.” Once you’ve got your debt paid off, invest your savings in growth stock mutual funds and possibly unlevered real estate. Do not lend it to others and do not invest in bonds or bond funds. I think that foolishly limits your investment options, but there is something appealingly old-school about it.
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Last weekend The New York Times, no doubt in response to criticism that the media reports nothing but grim news about the economy, did its best to cheer us up with an article about how a stock market debacle from 75 years ago wasn’t really all that bad after all.
It started out squarely addressing the problem.
Historical stock charts seem to show that it took more than 25 years for the market to recover from the 1929 crash — a dismal statistic that has been brought to investors’ attention many times in the current downturn.
I’m not that easily cheered up, partly because I understand the nature of the optical illusion that makes those charts “seem to show that it took more than 25 years” to recover from the ‘29 crash. The charts tend to make the uninformed observer think it took 25 years to recover because it’s actually true. It was not until 1954 that the Dow got back to its 1929 high.
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I’m sure many of you read Get Rich Slowly anyway, but in case you don’t, I’ve got a guest post there today about target date funds.
free copy in the hopes that I would say something nice about it. You have to admire his courage. I rarely say nice things.
Books, Investing | Frank Curmudgeon | 
May 11, 2009 8:00 am | 
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