He’s definitely at the high end of the raw brainpower scale. A Ph.D. biochemist, he went on to became a neurologist. But today William J. Bernstein is one of the most respected investment writers in the country.
He didn’t plan it that way. That’s how it is. He is best known for his website, efficientfrontier.com, and for his easy-to-read book, The Investor’s Manifesto: Preparing for Prosperity, Armageddon, and Everything in Between (Wiley, 2010). His new goal? “The millennials can be saved,” he said in a recent telephone interview. And he’s happy to do it for free or, if unavoidable, 99 cents.
What about the rest of us? Well, it’s a triage problem. In mass emergencies, doctors triage patients into three groups:
Those who will die no matter what is done.
Those who will live even if nothing is done.
Those for whom treatment is the difference between life and death.
Bernstein sees older people in the first two groups. They will either be OK, with enough money to retire comfortably, or it is too late to help. But the millennials, who were born between the early 1980s and the early 2000s, have time. What they do with their money will make or break their financial future.
Now, in Bernstein’s nearly free 13-page Kindle book, they can get the essentials of an investment education and his investment recipe for a secure future. The title: If You Can: How Millennials Can Get Rich Slowly.
When I asked about the price of the book, Bernstein explained that Amazon allows Kindle books to be given away only about one day each month. The rest of the time, the minimum charge is 99 cents. He would like to give this book away all the time, but he can’t. My suggestion: Even if you have to pay 99 cents and you’re well past the age of the millennials, get it. Read it.
In its 13 pages you'll learn how to invest your money for practically nothing and get a link to a simple Excel spreadsheet. It will allow you to see what you are likely to accumulate in 20 to 40 years, starting with nothing. You’ll also read some very direct talk about the financial services industry.
Here’s a sample: “In fact, the prudent investor treats almost the entirety of the financial industry landscape as an urban-combat zone. To be avoided at all costs are: any stockbroker or ‘full-service’ brokerage firm; any newsletter; any adviser who purchases individual securities; any hedge fund. Most mutual fund companies spew more toxic waste into the investment environment than a Third World refinery. Most financial advisers can’t invest their way out of a paper bag.” Tough talk? You bet. But richly deserved.
The same 13 pages also contain a good reading list for further education. And while Bernstein doesn’t suggest it, you should add his The Investor’s Manifesto to the reading list, also available in a Kindle edition. While you’re at it, take a look at his brief examinations of major issues: risk, life cycle investing and asset allocation, all available as very short Kindle books.
As someone who has written or co-authored five books, I wonder about the future of books. Bernstein may be a stalking horse for the future of book publishing. That future is: “Less is more.”
Yes, books are being digitally ephemeralized. But it also appears that short is beyond good. In a time-starved world, short is essential. Perhaps that’s why historian Niall Ferguson’s cosmic dissection of our ills, The Great Degeneration: How Institutions Decay and Economies Die (Penguin Press, 2012) clocks in at a mere 151 pages.
Just as the cost of newsprint can drive newspaper publishers mad or bankrupt, the cost of printing, binding and warehousing books is a defining cost for traditional book publishers. The introduction of electronic books means that writers can self-publish, cut prices and still make as much money as they could writing a traditional book.
Here are the economics: A typical book contract pays 10 percent of retail price for the first 10,000 copies sold and 15 percent thereafter. So the writer of a $24 book makes $2.40 to $3.60 a sold copy. (Trust me, this is a hard way to pay the bills.) With a Kindle book on Amazon, the writer gets 70 percent of the sale price. In other words, a self-published electronic book can be half the price of a traditional book, and the writer will still make 2.33 to 3.5 times as much as with a traditional book.
SCOTT BURNS is a principal of the Plano-based investment firm AssetBuilder Inc., a registered investment adviser. His email address is firstname.lastname@example.org.
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