Skip to main content

Review: The Bogleheads' Guide to Investing

The Bogleheads' Guide to InvestingThe Bogleheads' Guide to Investing by Taylor Larimore
My rating: 4 of 5 stars

A Boglehead is an investor who follows the philosophy of Vanguard founder John Bogle. This book contains simple, honest, and wise financial advice based on that philosophy. Contrary to active investing, with its market timing and performance chasing, the Bogleheads espouse passive investing, and base their strategy on Efficient Market Theory (EMT) and Modern Portfolio Theory (MPT). I’ve considered myself a Boglehead since 2008, when I stumbled upon the Bogleheads forum and moved my money into Vanguard funds. I highly recommend this book to beginning investors (it's pretty basic).

The three authors present not only their own opinions and Bogle’s, but include many quotes from big names like William Bernstein, Warren Buffett, Paul Farrell, Richard Ferri, Burton Malkiel, Bill Schultheis, Charles Schwab, Larry Swedroe, and Jason Zweig.

The book has an appendix of excellent investing books, many of which I’ve read (see my finance reviews).

The Bogleheads’ tenants
Choose a sound financial lifestyle. Start early and invest regularly. Know what you’re buying. Set goals and work toward them. Use index funds. Keep costs and taxes low. Rebalance. Diversify your portfolio.

Muni bonds make sense for those in higher tax brackets (25%+), but compare yields to the after-tax return on taxable bonds. Morningstar has a calculator.
Hold your age in bonds, plus or minus based on risk tolerance.
Use short or intermediate-term bond funds.

Asset allocation
Use life-cycle/target date funds, or copy them in building your portfolio.
The noncorrelation of REITs makes them worth holding in larger portfolios. Make them a max of 10% of equities allocation.
Make international stocks about 20% of equities.

Don’t buy life insurance until you have dependents. Then, buy term.
Seriously consider disability coverage. Buy as much as you think you’ll need. Consider purchasing with after-tax dollars.
Property insurance should be replacement-cost.
A personal liability umbrella policy of $1 million is a must-have.
Choose an insurance company with an A.M. Best rating of A or better.

When hiring a financial advisor, hire a fee-only (not commission- or fee-based) CFA or CFP.
In over 200 years, there’ve been no 15-year periods where US stocks have lost money.

View all my reviews


Popular posts from this blog

The difference between burritos, chimichangas, and enchiladas

I love Mexican food, but I'm embarrassed to admit that I always get confused between burritos, wet burritos, chimichangas, and enchiladas. Here are the descriptions, with the differences in bold and pictures following each description.

A flour tortilla wrapped around a filling (meat, beans, vegetables, etc)

wet burrito
A burrito that's covered in red chili sauce and cheese. Because of the sauce covering, it looks like an enchilada, but it's made with a flour tortilla, whereas the enchilada is made with a corn tortilla.

A burrito that's deep-fried. Sometimes covered with cheese or another topping.

A corn tortilla wrapped around a filling, covered with chili pepper sauce

Wikipedia: BurritoWikipedia: ChimichangaWikipedia: Enchilada

Edit scanned documents with Word 2007

Office 2007 includes support for converting scanned documents to editable text using OCR (optical character recognition). To get your text from a paper document to Word 2007:
In the Control Panel, open Add or Remove Programs.Find Microsoft Office, click it, and click Change.In the Office Installation Options window, expand Office Tools, click Microsoft Office Document Imaging, and select Run from My Computer from the dropdown.Click Continue or Next until you reach the end.You can now scan documents and convert the scanned images to editable text:
From the Start Menu, find Microsoft Office, then select Microsoft Office Tools, then click Microsoft Office Document Scanning.Choose your preset and options, then click Scan.The scanned image should open in Microsoft Office Document Imaging. To perform OCR and open the editable text in Word, click Tools, Send Text to Word.You can now edit and save the scanned document as a Word document.

My LASIK laser eye surgery experience

Yesterday was a turning point in my life; I had laser eye surgery (LASIK)! Here's a brief summary of my experience.

When I was 16, I barely passed the eye exam at the DMV, so they told me I had to see my eye doctor. Being a self-conscious geek, I opted for contacts over the stereotypical glasses. Although they were fine for most of the day, my contacts always dried out around 8 or 9 PM. My friends will tell you they got sick of my complaints that "my eyes feel like corks!" and "these contacts feel like sandpaper!"

Over the years, I've tried more than 10 different types of contacts, including extended wear, overnight wear, and high-moisture contacts. For a while, I even had contacts with bright blue artificial irises to cover my natural grayish ones. I got a lot of compliments, but they didn't help with the dryness.

I decided to put an end to the suffering this year. LASIK isn't cheap; reputable surgeons charge about $2000 per eye. It hurt to max out my…