The World's Best Book Summaries
What assets should you never invest your money in, according to Warren Buffett? Why are these investments dangerous? Warren Buffett prefers equities over other forms of investment. He cautions against bad investments such as unproductive assets, junk bonds, and financial derivatives. Keep reading to learn why you should steer clear of these investments, according to Buffett.
Why invest in index funds over mutual funds? Could mutual funds beat the market in the long run? Only a tiny fraction of actively managed mutual funds will outperform index funds in the long run. This is because financial assets tend to converge to the average price over time—a statistical tendency called “reversion to the mean.” Here’s what reversion to the mean means for mutual fund investors.
Do you know how much money you’re actually spending? Or does your end-of-the-month bank balance come as a surprise? Why is it important to budget your expenses? Many people don’t budget their expenses: They just spend whatever is left after all their essential bills (e.g. rent and utilities) have been paid off. This is because creating a budgeting strategy that works for you is time-consuming, work-intensive, and complicated. Here are several budgeting strategies so you can either choose one that works for you or use them as an inspiration to create your own.
What’s the difference between mutual funds and index funds? Which gives a higher return on investment? According to John Bogle, the author of The Little Book of Common Sense Investing, mutual funds generate significantly lower ROI than index funds. Furthermore, the gap between mutual funds’ ROI and index funds’ ROI is set to increase in the future. Here’s why mutual funds’ ROI is going down, according to Bogle.
Why does Warren Buffett criticize the Wall Street approach? What are some ways in which Wall Street investment firms mishandle investors’ money? According to Warren Buffett, Wall Street’s business-as-usual practices highlight many areas in which most investment companies don’t serve the interests of the people whose money they steward. Specifically, Buffett highlights the failings of CEO culture, shady accounting, overpriced acquisitions, and the systemic dangers of financial derivatives. Keep reading to learn about Warren Buffett’s criticisms of Wall Street’s practices.
What is the difference between bond ETFs vs. bond mutual funds? Which delivers a higher return on investment? Bond mutual funds are actively managed funds where investors’ capital is distributed among select securities. In contrast, bond ETFs purchase securities that reflect certain bond indices. According to John Bogle, the author of The Little Book of Common Sense Investing, bond index funds deliver better returns than bond mutual funds. Here’s why bond ETFs are more profitable than bond mutual funds, according to Bogle.
What is Warren Buffett’s investment philosophy? What is the best piece of advice you can take on board from the world’s most successful investor? The key philosophy that Buffett drives home is that owning a stock means owning a piece of an actual, real-world business. Using this “owner mindset” as a starting point, Buffett provides guidance to reasonable expectations, best practices in investing, and certain pitfalls to avoid when investing. Keep reading to learn about Warren Buffett’s philosophy and best practices for investing.
Wondering how to financially prepare for a recession? How can you prepare if you’re living paycheck to paycheck? For more than a year, economists have predicted that the U.S. will enter a recession. Many Americans, through no fault of their own, don’t have the financial means to take the steps that many financial experts recommend to navigate a recession. Read on to learn how to financially prepare for a recession without an emergency savings fund.
How do mutual funds work? Why do mutual funds underperform index funds? Mutual funds generate profits for their investors by beating the market-average returns. According to John Bogle, the author of The Little Book of Common Sense Investing, doing so is a zero-sum game: For every investor whose returns are above-average, there must be another whose returns are below-average. Keep reading to learn about the disadvantages of mutual funds.
What is the book The Essays of Warren Buffett about? What is the key message to take away from the book? Compiled from Buffett’s annual reports to Berkshire Hathaway shareholders, The Essays of Warren Buffett provides a glimpse into the mind of a man whose ideas contrast with those of the typical Wall Street mogul. His insights on investing are simple yet difficult to put into practice, while his thoughts on the culture of the wider business world shine a light on the values that shape modern finance. Below is a brief overview of The Essays of Warren Buffett: Lessons