The Armchair Millionaire

by Douglas Gerlach and Lewis Schiff

Book Overview

Invest my money? Forget it. Who knows which way the stock market is headed? And I just plain don't know how to do it. I'll stick my paycheck in the bank, keep my credit card debt as low as I can, and... This description may be from another edition of this product.

• Format: Hardcover
• Language: English
• ISBN: 0743411919
• ISBN13: 9780743411912
• Release Date: April 2001
• Publisher: Atria Books
• Length: 208 Pages
• Weight: 0.95 lbs.
• Dimensions: 0.8" x 6.4" x 9.6"

Customer Reviews

Great Primer on Investment Strategy and Implementation

I was pretty impressed with this book. I would give it an A+ except for two reasons. Their strategy suggests a 100:0 asset allocation ratio of stocks to bonds regardless of the investor's age. The other reason is no mention of withdrawal strategies once you get your million dollars. Most computer simulations suggest a maximum withdrawal rate of 4% of assets with an annual inflation adjustment. For these 2 reasons I give the book an A. As hard and complicated as Wall Street tries to make investing..... to make you think you need a broker, the steps for successful investing are very basic. This book does hit all the basic steps correctly. #1 is to live below your means so you can save at least 10% of your gross each year and invest it. This sounds easy, but it apparently is not since the average U.S. household credit card debt is now around $8,000 saving rates are below 1%, and average household net worth is below $100K. The book should have mentioned the classic book The Richest Man in Babylon with regards to the merits of living below your means so you have money to invest. #2 is to use automatic investment so you pay yourself first. If you set up an automatic way of investing, then you can't spend money you don't see. After all, the U.S. government adopted automatic payroll deduction to pay income taxes right after WWII because it was concerned people would not save to pay their tax bill. The government using automatic payroll deduction to assure they always get their share of your money, so why not use this method to keep some of your money for yourself? If you use automatic investment, you get the advantages of dollar cost averaging as well. #3 is to invest your savings in stocks and use low cost index funds for your investments. The book got it right in saying that stock brokers are not your friends. Often their objective is to move your money into their hands per the classic book Where are the Customer's Yachts? As I stated above, I think the book should have suggested phasing into some percentage of bond investments as you age. Bond index funds should be used for the bond investments. As a yardstick measurement of how well one saves and invests, the book should have referenced The Millionaire Next Door's expected net worth formula of 1/10 of your age times your income. This gives you a frame of reference to how well you have saved and invested. One inconsistent argument the book uses is that institutional investors have roughly 40% of their investments indexed while individuals only have about 5% indexed. This fact is true. However, institutional investors most commonly use a 60:40 stock to bond asset allocation and the book recommends 100:0 stocks to bonds. Most studies show that bonds lower portfolio risk significantly but returns do not suffer dramatically. Other reviewers suggest reading the web site versus the book. Call me old-fashioned, but I hate reading more than about 1 or 2 screens worth of any web site......I

I think it's an easy way to start investing

I'm a brand-new investor. I don't have a lot of money, either. I first picked up this book because I liked the title. Plus the chair looks really cozy, doesn't it? When I read the inside cover of the book, it sounded like the perfect book for me.I like how easy it is to read. It's funny, too. I also like that it has stories about real people and money. Mostly I like that the plan is really simple. Even though I don't have a lot of money and I don't know a lot about investing yet, I can start using the plan right away. I just need to pay off some little debts first, and the book helped me figure out how to do that too.I live in a rural area so there aren't really any investment classes nearby. Nobody I know ever really talks about money, either. This book helped me learn more without any classes. I will definitely recommend this book to some of my friends who want to learn how to invest, too. I haven't looked at the website yet. I hope it has even more good information.

Right Book, Right Time

I've been reading other investment books and getting bogged down on fancy investing techniques. The Armchair Millionaire came out of nowhere for me and it was definitely the right time to find it. It's straightforward but really smart advice.A friend of mine gave it to me as a gift. She started her own "Armchair Millionaire" plan some time ago and she seems to be doing really well, even in these difficult, volatile markets. I'm putting my five steps to financial freedom into action now and I'm real excited about it.

Really great jump start for new investors

If you're new to investing (like I am), you'll appreciate this book a lot. The authors made sense of a lot of what I've heard about the stock market and mutual funds but never really understood -- things like index funds and why they're better than buying stocks or other kinds of funds.I particularly liked their advice on budgeting (they say it's okay to skip making a household budget because most people won't ever stick to it, like I never did) and how you can overcome human nature and procrastination with things like automatic investment programs.I guess it's true that a lot of the advice in the book isn't new, if you're some kind of investor with years of experience. But the way it's all pulled together really makes it easy to understand for someone like me who hasn't been putting money into the stock market for very long.I also like the way the book brings in all kinds of everyday people with their own tips and advice, not just some expert telling you what to do all the time. These people make it seem possible for anybody to overcome their problems, like how to get out of debt, and get started on the way to becoming a millionaire.When I finished the book, I really felt like I had learned a lot, not only about how I could be investing better, but also why I had been making mistakes in the past and how I could improve. I guess time will tell -- ask me in 20 years when I just might be a millionaire myself!

A Great Example of K.I.S.S.--"Keep it simple, stupid"

Besides the fact that the authors manage (I think successfully) to present themselves clearly and in a straightforward manner, I think what's worth appreciating about this book is what's NOT in it: It has none of the typical "my-idea-is-newer-and-better-than-yours" blather that makes up so many investing books these days.Instead, the authors promise to keep it simple and they do just that. It's tempting to want to ask, "what's new in this book." I think what's new is the fact that it's got an easy and proven plan to build a million dollar portfolio. Proven with the author's own money!That's pretty good stuff for a $20 book. The authors show great restraint by not dwelling on the gobs of investing science behind the Armchair Millionaire's Five Steps to Financial Freedom. In fact, there's enough Nobel prize winning research behind their method to choke a horse. They mention it along the way but avoid the temptation to bog you down in it. Instead, they stick to their own self-imposed line and keep it simple. The risk of this is they can be called simplistic. The value, of course, is that they provide all the tools you need--and only those tools--to do-it-yourself. In other words, they'd rather you successfully start your own portfolio than convince you that they are smarter than everyone else. Rare indeed, these days.My recommendation is to give this book to people you care about--People who you want to succeed. There's an old saying, you can lead a horse to water but you can't make them drink. This book is the water. It's got everything you need to build financial success for yourself. What you do with the information contained inside is up to you.PS: This is my first book review--I finally felt I could say something that might help someone make a smart decision. Hope you like it!