Yes, You Can Be a Successful Income Investor!

by Phil DeMuth and Ben Stein

Book Overview

With the bursting of the stock market bubble, and after 13 rate cuts by the Federal Reserve, yields on CDs and money market funds tread at historic lows - a negative return after inflation. Gone are... This description may be from another edition of this product.

• Format: Hardcover
• Language: English
• ISBN: 1401903193
• ISBN13: 9781401903190
• Release Date: January 2005
• Publisher: Hay House
• Length: 223 Pages
• Weight: 1.20 lbs.
• Dimensions: 0.8" x 6.3" x 9.5"

Customer Reviews

A very different investment book

This is a very different investment book. While the books one typically sees suggest ways to get rich-- that is, to accumulate capital-- as quickly as possible, this short, readable book suggests that those near or in retirement should be thinking about how to deploy their resources in a way that maximizes their income. That is, staying comfortable is more important than getting rich. Stein and DeMuth explain that most investment fads are not only unsuitable for older investors, but, worse, they just don't work. They make a point that many people who lost their money in the market meltdown a few years ago should have thought about: If an investment is too complicated to understand, then it should be avoided. In the end, there's no magic bullet; diversification and adherence to investment basics will pay off. The body of the book is devoted to explaining how to do that. The book discusses various types of bonds, dividend-paying stocks, real estate investment trusts, and annuities. The one thing that is mentioned in every chapter is the basic principle that risk and reward are in balance; the only way to get a high reward is to take more risk. Striking the correct balance is, of course, an individual decision, and the most important part of the book is the discussion about how to combine various types of investments in in a way that balances risk and reward. There are numerous sample portfolios and many specific bond and stock funds suggested-- and also numerous cautions that investors need to do their own research before they buy anything. The authors provide a link to their website, which provides current information and links. A bonus is that unlike many investment books, this one is very readable. The authors don't dumb anything down, but they take pains to explain things without using jargon. Readers familiar with Stein's TV and movie style of delivery will recognize it here, too. This is a very valuable book that will provide the reader with a lot to think about-- and a good way to do that thinking.

Who knew Fixed Income could be so cool

The authors do a great job breaking down an extremely sophisticated asset class so the everyman investor can optimize their returns while minimizing risk(Maximizing the Sharpe ratio). Their focus on a real return is a smart one. The S & P 500 has underperformed the total return on lowly 3-month Treasury bills for what is now more than 8 years, earning average annual total returns of just 3.2% since early-1998. Over the past decade, the S & P 500 still sports an unimpressive annual total return of just 8.20%, despite containing the best 4-year market performance (1996-2000) since the rally from post-depression lows in the 1930's. YIKES!!!!!! This makes one take pause and consider adjusting the allocation. Let's just say the "market portfolio" can no longer be considered the S & P 500- This is what Harvard and their endowment managers realized years ago. A great book that provides a tremendous amount of information and that I will use again and again in the future. Take a look around at fixed income books out there. There aren't many of them, and this is by far the best one.

Income Investing Bible

This was the best income investing book I have read. I loved this book, it was superbly well written with practical income investment advice in stocks, bonds (treasuries, corporate, municipal, junk etc) and real estate (REITs). This book would be very useful regardless of the amount of money you have to invest. The authors make specific recommendations without any vague statements. There is income portfolio advice. It is easy to read and I finished it in one sitting. The book had a lot of humor sprinkled throughout. I loved the two stories in one of the earlier chapters in which the authors said that if you understood these 2 stories you would understand the bond market and they were right on! There are plenty of numbers and figures but the authors have accomplished a remarkable feat in that they wrote the subject matter in such a way that any high schooler could understand. Yet the material is far from "dumbed down".

America's Renaissance Man

Ben Stein is one of the very few authors whose work is an outcropping of his successes in life - not a reaction against his failures. If you read this book, or any other work by him, you'll realize that this guy gets it. He understands how to live a successful life and gives advice that's derived from his own experiences - not what he wishes he had done. Savings, investment, love, happiness - he tackles these issues with the realism that is so often slighted by self-proclaimed gurus who haven't got a clue. My litmus test for authors of books such as these: Would this guy go broke if I nobody bought his book? Ben Stein is doing all of us a great favor by sharing his knowledge, which has allowed him to live such a well-rounded and successful life.

Excellent handbook to take charge of your financial future

Ben Stein and Phil DeMuth are very dedicated to helping people get serious in preparing for retirement. They bring several strong virtues to this task. First, they not only reject investment fads, they believe in and focus on solid investment basics. Second, they believe that you have the final responsibility for your money, so if an investment or financial program is too complicated for you to understand in every detail, they advise you to stay away from it. Third, they understand and preach diversification. Simply, diversification aids the investor by removing the risk associated with investing in just one firm or one market sector and therefore stabilizes earnings. The idea behind this book is quite good. For the past two or three decades, all the talk around investing has been about growth stocks where you make your money by realizing capital gains. Before the age of double dividend taxation, people invested for the income provided by dividends. The present market for stocks is priced high in historical terms (see Stein and DeMuth's excellent "Yes, You Can Time the Market" to understand why this is true) and it is all too likely that a correction could provide losses instead of gains. In this book, the authors provide an approach to investing that provides a return by gaining dividend income from stocks and interest income from bonds while avoiding the risk of capital losses as much as possible. Stein and DeMuth begin by talking about bonds. They provide an excellent primer and then talk about the various types of bonds, their risks, and their returns. Their discussion will help the reader understand that a higher return comes with increased risks. In effect, the higher return is a compensation for taking on that higher risk. The authors help the reader understand that there are some bonds whose increased risk is worth taking and many whose higher return is not sufficient compensation for someone counting on the income for their daily bread. The discussion then turns to developing a stock portfolio that is designed for income rather than capital gains. This is an excellent and important discussion because it runs counter to most of the stock talk of the past generation. Just as with bonds, they show the effects of various portfolio constructions. They are very good on what matters to the income investor and what is dangerous to your financial health. They have a short chapter on preferred stock that is interesting and gives adequate warning to stay away from complicated investments that you don't understand. The section on REITs is terrific and will help the average investor understand them. They can be an excellent part of a portfolio and are an excellent way to participate in real estate without having to own and maintain your own properties. Remember, in retirement you want to be enjoying yourself, not going through the hassle of being a real estate manager. They also talk about annuities in a sensible and helpf