Fail-Safe Investing

by Harry Browne

Book Overview

Do you worry that you're not paying enough attention to your investments? Do you feel left out when you hear about the clever things other investors seem to be doing? Relax. You don't have to become an investment genius to protect your savings. Distilling the wisdom of his thirty years' experience into lessons that can be applied in thirty minutes, Harry Browne shows you what you need to know to make your savings and investments safe and profitable,...

• Format: Paperback
• Language: English
• ISBN: 031226321X
• ISBN13: 9780312263218
• Release Date: January 2001
• Publisher: St. Martins Press-3PL
• Length: 176 Pages
• Weight: 0.30 lbs.
• Dimensions: 0.5" x 5.0" x 7.1"

Customer Reviews

This book changed my investing life

I'm not your average reviewer. I think it's largely a waste of time so I just pass on it. But this time it's different. Before I met Harry Browne (through his books and radio shows), I was addicted to all sorts of financial pornography. Experts, books, forums, investing clubs, technical analysis, fundamental analysis, trendlines, P/E, book value, blah, blah, etc. Always tweaking, never happy. I was always up at night wondering how I was going to make a mistake that would wipe me out. Then I met Harry and his wisdom. He makes the case that no one knows what's going to happen. No one. Even the cockiest hot-shot fund managers suck over the long run. Turns out, he's right (with the notable exceptions of guys like Buffet and Templeton--but are you as good as they are?) So I asked myself: what am I doing trying to beat the market? Over the long run, I just can't. So you should probably come to that realization too. You can't beat the market. Just let it go........ So if you can't beat the market, how do you get solid returns year after year with very little volatility? The Permanent Portfolio(PP). Inflation, deflation, prosperity, recession. Dollar up, dollar down. No matter what's brewing, you're covered. Let everyone else debate (because they don't know anyway). Harry's PP has returned an average of 9.9% (roughly 5-6% over inflation) with extraordinarily low volatility for nearly the last 40 years. It will do equally well in all investing climates--which puts your mind at ease. I'll let novice investors chase the "hot" funds while I sit back and relax knowing that I'm always covered no matter what happens. That level of "peace of mind" has no value--it's priceless. Thanks Harry--you've changed my life--may you rest in peace.

Practical and Effective Financial Concepts

Every book written by Harry Browne is worthwhile, and this is no exception. 'Fail-Safe Investing: Lifelong Financial Security in 30 Minutes' should be required reading for anyone considering investing their funds with 'hot' fund managers, 'winning' advisory services or 'can't miss' trading systems. It also lays out a solid, common sense foundation for lifelong fiscal responsibility and profitability, and should be required reading for all high school students. Harry passed away last year at the age of 73, and he will be dearly missed by those of us who treasure his legacy of liberty, independent thinking and personal responsibility. His life was a one of a kind gift that God blessed our world with.

Powerful Little Nuggets of Wisdom

Honestly, while it takes longer than the thirty minutes advertised on the jacket and first few pages of the book to read through all seventeen rules, the extra time spent is well worth it. Mr. Browne offers the reader simple rules to learn and help one preserve and grow money wisely. As such, it tells you the easiest ways to lose money, and how to avoid them. Although I do not agree with his recommended approach to investing, I do agree entirely with the essence of his seventeen rules which superbly present common finance and investment misconceptions and skillfully refute them. Speaking of his seventeen rules, the first five can be condensed into one simple rule: Forecasting = Fortune Telling. From Browne, we learn that no one can predict the future, yet many of us entrust our hard-earned money without any hesitation to modern day Gypsies- financial planners, emoneyf (mutual fund) managers and stockbrokers, who constantly tell us that they can predict the future using sophisticated eeconometricf forecasting tools. Browne reminds us that our wealth begins with what we earn, not with what we invest, and before we can invest, we have to earn. Although we can always borrow our way to bankruptcy with ease, we can borrow our way to prosperity only in our dreams. In the end, basing our earnings won through blood and sweat on the elaborate crystal-ball gazing of financial witch-doctors is the surest path to losses and total ruin.Browne also delivers plain talk on risk, investment and speculation, and tells the reader that no one can ever hope to eliminate risk entirely. The best anyone can do is to develop realistic strategies for dealing with risk. As such, it becomes painfully clear that there is no such thing as a risk-free investment. This even includes for example so-called erisk-freef US Government Securities backed merely by the full faith and credit of the United States Government (I personally wonft think any less of the reader who laughs at that last sentence). Who knows what the future holds, and just because the worst-case scenario- a default or bankruptcy, has never happened does not necessarily mean that it can not happen tomorrow. In keeping with this, his thirteenth rule exhorts us to keep some assets outside of our native country, and is a brilliant touch. I had to laugh when I read the various calamities- natural and unnatural, which could befall our investments in our native country. However, one should keep in mind that such calamities can occur in ANY country. Also, holding some assets outside the US may not provide the secrecy or safety Browne says it will impart, simply because of the inter-connectedness of the global economy and the incredibly long reach of the US government.At no point does the book let the reader off of the hook. We ultimately bear the responsibility for our investment decisions, and Mr. Browne is absolutely right when he says to never assume that what you have earned today can be easily

Financial Safety in a Nutshell

I rate this book five stars, less for the contents of this book on its own, but rather for the series of books that Mr. Brown put out in the '80's, _Why the best laid investment plans go wrong_ in particular. This book contains the heart of those earlier books without all of the explanation, which may be why the point of it missed the earlier reviewer. Browne suggests dividing ones portfolio into two sections -- a "variable portfolio" that you can speculate with and a "permanent portfolio" which should be set up to survive *any* possible financial disaster, war, revolution, natural disaster, or whatever. He achieves this by diversifying in several different classes of investment, at least one of which should be helped by whatever happens. So if it's hyperinflation that arrives, and stocks and bonds are tanking, the gold part of your portfolio will go through the roof -- if the great depression comes back, the bond part of your portfolio will skyrocket. Whatever happens, the overall value of your portfolio should move gradually upward. I know now that some people are laughing, what gold? Nobody invests in gold any more. You need to understand that Browne is advacating an investment strategy for the ages. So what if gold is in the dumps for a decade or two? When that disaster we can't even conceive of wrecks the world economy in 2020, won't you be glad you've got that gold bullion in an offshore account to help you rebuild your life. The "permanent portfolio" is not about getting rich quick, it's about avoiding becoming poor quick. The "variable portfolio" is about getting rich quick, if you can. I first read Browne's advice a couple of decades ago when I was living overseas and had just had the fun of going through a coup against the government that involved three days of firefights between govt troops and rebels *inside* the bank where every dime I owned was kept. Mr. Browne is right. Nobody knows what will happen next. If you have money you can't afford to lose, you have to be ready for anything, and Harry Browne gives you the tools to do so.

THE BEST-KEPT SECRET IN THE INVESTING WORLD...

...according to Harry Browne, is the fact that "almost nothing turns out as expected." And yet, unlike in most other areas of their lives, in which they rightly view soothsayers as entertainers devoid of an inside track to the future justifying any go-for-broke departure from the straight and narrow of prudential common sense, somehow in the sphere of investing, perhaps driven by the fear of being "left behind" by the latest opportunities for speculative windfalls (and, need we add, spectacular losses?), millions of otherwise practical people are enchanted by one siren song or another: the claims of self-anointed "insiders" with "perfect" track records (i.e., a few lucky haphazard predictions from yesteryear masking the several dozen by the same advisor which turned sour), or the "scientific" systems of various gurus which start to fail the minute your money is on the line. By contrast, the desires of the great majority of us for the protection and enhancement of that part of our savings we cannot afford to lose as we prepare for retirement and beyond, can be best served by an investment strategy which emphasizes safety and simplicity - and which is diversified across four major investment media - stocks, bonds, gold and cash - so that, no matter what the uncertain future brings to the economy, our portfolios contain investments geared to respond well to each major trend - prosperity, inflation, tight money, or deflation. And with this strategy in place for those assets readers are counting on for their long-term survival, they still may, if they wish, speculate with that portion of their fortunes they know they can afford to lose. Ultimately, Browne's investment advice is a sound application of what, in that intoxicating book of personal philosophy which has helped so many in their quest for freedom and self-understanding, HOW I FOUND FREEDOM IN AN UNFREE WORLD (1973), he calls "The Uncertainty Trap: the urge to act as if your information were totally certain." And in their herd-based quest to sound "professional" and ahead of the competition, too many investment pundits and "experts" present themselves as "in the know" about not just why the market rose or fell today (I'm sure I'm not the only one who enjoys a great horselaugh whenever he hears broadcast reports to the effect that "the market rose today on rumors [or fears, or puffs of smoke] that..."), but what it will do tomorrow - and next year (as the always good-humored Browne points out, anyone with an authentic gift for financial prophecy wouldn't be wasting his time hawking newsletters and trading systems, or playing the talking-heads game on cable - he'd be helping the likes of George Soros and Rupert Murdoch invest a few spare billion, en route to owning his own country). Everything Browne writes merits the closest attention, and in this, his self-proclaimed last book on investing, he here presents a sort of summa of the common-sense wisdom he h