This book, first published in 2005 and now updated to include new recommendations and financial results through 2007, represents the best of what I have learned in more than 40 years of helping people with their money.

In 16 chapters this book distills the most important messages from my company’s free investment workshops and my years of working with people one-on-one.

Before you buy this book (and I hope that you will), you may want to know more about what’s inside. This article will show you.

•    Listed below are the Table of Contents and a brief chapter summery for each chapter.
•    You can download the Introduction and also a free sample chapter to check this out before you buy.

The book can be purchased at Amazon.com by clicking here. 

In this article, I’ll put a little flesh on the skeleton of the table of contents and give you a guided tour of the contents.

Introduction

I wrote this book partly to protect investors from practices I experienced first-hand when I was fresh out of college many years ago. Unfortunately, most of those same practices are still in wide use. In the financial industry, the emphasis is too often on selling. Doing the right thing for the customer can become merely an afterthought.

Chapter 1:  Why Investors Fail

This is my way of telling why investors need this book. It’s a list of common mistakes investors make – and how to avoid them. People fail to make written plans; they either take too much risk or not enough. They don’t know what they need. They trust people and institutions that they shouldn’t. They can’t tell a good investment from a bad one. They make extremely important decisions based on emotions instead of facts. They either don’t know or choose to ignore how much money routinely slips through their fingers in the form of expenses, fees and taxes. It’s not a pretty picture, and it’s why people need help.

Chapter 2: A Tale of Two Investors

I can give you lists all day of what I think you should and should not do to take care of yourself. But you may remember the points longer by seeing the real-life results. This chapter paints a picture in words of retirement done right and retirement done wrong. You will meet two real-life people I know. George has done nearly everything right and is reaping the rewards. Roger, on the other hand, has made nearly all the mistakes outlined in the first chapter – and he continues to make them. He started with plenty of money, but his attitude and behavior are taking a toll on his marriage and his retirement.

Chapter 3: Lessons from Smart Investors

To move past the negative tone of the first chapter, I wanted to share what I’ve learned from the smartest people I know. Here I outline “12 smart steps” that I’ve seen smart people take. This discussion goes beyond strictly financial concerns to include a focus on what makes life really satisfying and worth living, regardless of how much money you may have. In my view, this chapter alone is worth more than the price of this book.

Chapter 4: The Psychology of Successful Investing

If you think of the first three chapters as sort of an introduction, you can think of this as one that gets down to some nitty-gritty material that Wall Street hopes you don’t understand very well. This chapter goes into detail about some of the toughest issues investors must face when they try to make good plans and carry them out. You’ll learn how the financial media and Wall Street – as well as your mind, your emotions and your habits – can team up to work against you. If you take this topic to heart, you can make your life more pleasant, have more money to spend in retirement and leave more to your heirs. I hope you will download this chapter and have a look.

Chapter 5: Who Are You and What Are Your Goals?

Here you will learn how to put together the basics of a retirement plan and how to review your plan if you already have one. You’ll learn a simple method of estimating how much income you will need in retirement and what that means about how big your portfolio should be when you retire. This is a critical step in applying the information in this book so you can Live It Up in your golden years.

Chapter 6: Your Ideal Portfolio

You’ll learn the concept of “smart diversification” using charts that my company shows to our new clients. You’ll learn how standard pension plans invest their assets and how you can emulate their approach. Then I begin to outline a portfolio that over the past several decades has provided higher returns than the pension plans, at less risk. This is the topic of this and the next three chapters. In Chapter 6 I also show you how to get the optimum combination of risk and return from the largest single component of the pension plan model, fixed-income investments.

Chapter 7: Profit from Real Estate and Small Companies

This is about the terrific advantage that long-term investors have historically received from owning stocks of smaller companies. You’ll find half a dozen dramatic graphs showing how such companies go in and out of favor with investors. You’ll learn how to capture this effect for yourself. The chapter also discusses the long-term benefits of owning real estate stocks known as REITs, for real estate investment trusts. You’ll see how making three simple changes to the standard pension portfolio can add hundreds of thousands of dollars of long-term return while reducing risk.

Chapter 8: Value: Owning What Others Don’t Want

Virtually all the famous portfolio managers of the past 50 years focused on value stocks. Here we find out what that’s all about. You’ll see why this works, how reliable this effect is and how you can do it in your portfolio.

Chapter 9: Putting the World to Work for You

This discussion adds the final essential asset class to the ideal retirement portfolio: international equity funds. You’ll find out why it’s a bad idea to rely only on U.S.-based companies and why I recommend that half of every equity portfolio be made up of international funds. This topic is especially important to retirees, who need stability; you may be surprised to see how effective international stocks are in this regard. By the end of this chapter you will know how to modify the standard pension portfolio to tap into this world of potential rewards and incorporate it into what I call Your Ideal Portfolio.

Chapter 10: Controlling Risks

Having an “ideal” portfolio is nice on paper, but one size doesn’t fit all investors. This chapter shows you how to fine-tune your portfolio so it’s just right for your individual situation and risk tolerance. I describe my own risk tolerance and how that applies to my personal investments. Then I show how the financial advisors in our company determine the individual risk tolerance of our clients. This is a critically important step as you figure out just the right mix of investments to meet your own needs, both for return and for safety.

The chapter title leaves little mystery about its topic, how you can keep your hard-won investment gains for yourself. This is one that many people on Wall Street hope you won’t read. Routinely, fortunes are made in the investment industry from gouging investors over and over and over in small ways. I tell you how to recognize and avoid the unnecessary costs of being an investor. You’ll learn about some expensive but common tax mistakes. Did you know that many people unnecessarily but willingly pay taxes twice on the same income?

Chapter 12: Putting Your Ideal Portfolio to  Work

In this chapter, the rubber meets the road, so to speak. You’ll learn exactly which no-load mutual funds will give you the asset classes I recommend in this book. You’ll find suggested portfolios for investors at Schwab, Fidelity, Vanguard and T. Rowe Price. You’ll learn about exchange-traded funds and tax-managed funds. And I describe a family of what I regard as the best mutual funds in the world, those of Dimensional Fund Advisors.

Chapter 13: Withdrawals: When Your Portfolio Starts Paying You

A lot of the information in this chapter, as far as I know, is not available anywhere else. That’s a pity because it can easily make the difference between running out of money during retirement or living well while having money to spare after making your dreams come true. In a way, this topic is like a salary negotiation between you and your portfolio.

Chapter 14: Hiring an Investment Advisor

If you have an investment advisor, do you know whether he or she is working in your best interests? This chapter tells you how to figure that out. If you get the right kind of advisor, you improve the odds that you’ll make more money while taking less risk – and that you will achieve your goals. I show you how to find a financial advisor whose interests are aligned with yours.

Chapter 15: Your Action Plan

This chapter is in the book because I know that all the things you are being asked to do may seem overwhelming. Where do you start? Is this the right time, or should you wait? I may be able to convince you that there’s a better way. But only you can do something about it. This chapter is designed to make it easier to get into action. If you can’t quite face up to the job of getting your whole financial picture organized, I’m guessing you can at least pick up the phone and make a call to schedule an appointment with somebody. If you can do that or have a discussion with your spouse or a trusted advisor, then you can do everything that’s necessary to get in gear when you’re stuck. I tell you just how to do it.

Chapter 16: My 500-year Plan

I have set up my estate so that after I’m done Living It Up, my money will outlive me and keep growing for many lifetimes. Building on the portfolio I have described in Chapters 6 through 9, you’ll learn how I made a one-time $10,000 investment that I believe will someday become a $20 million gift to charity and provide a comfortable retirement for my grandson. In these pages I show how my will provides for my children and my spouse, then leaves what I believe will grow into a huge amount of wealth to be distributed to charities for perhaps hundreds of years. I’m not recommending that everybody do this, but I hope this will help persuade successful investors to consider new ways to express their generosity.

Appendixes

In Appendix A, I describe 10 important lessons I learned from John Bogle’s great little book, “The Little Book of Common Sense Investing.” In each case, I quote directly from his book, which I strongly recommend.

In Appendix B, you’ll find my suggestions for further resources. These include online sites like AAII.com and MarketWatch.com, a number of investment and psychology books that are very helpful and a list of half a dozen columnists whose work is always worth my time.