Personal Investing: The Missing Manual

Introduction

Why should you pick up a book on personal investing? The answer is simple but stark: Because you have no choice. The sad truth is, you can’t save enough money in your lifetime to live comfortably in retirement (even with a Social Security check), send your kids to college, afford long-term health care, or take a dream vacation. Inflation is higher than savings account interest rates, and Social Security benefits go down while the age of eligibility goes up. To live comfortably in the future, you have to create a nest egg and grow it by investing.

Schools typically don’t teach personal finance, so unless your parents were savvy investors, you were probably unceremoniously dumped into the working world without much knowledge of financial planning or investing. To make matters worse, investing, like pumping gasoline, has evolved into a self-service industry, with 401(k)s replacing pensions, and discount brokerages standing in for full-service finance houses. If you don’t know how to plan and invest for your future, you won’t have a very rewarding one. So unless you were born wealthy or hit the Powerball lottery, you need to learn something about investing.

Don’t worry. As you’ll learn shortly, investing doesn’t have to be complicated. You can build a nest egg that meets your needs barely breaking a sweat. However, if you discover that you enjoy fiddling with investments, you can add plenty of tricks to your investment tool bag.

Why Investing Is Important

Coughing up the cash ...