Review
If you had to summarize Fail-Safe Investing in three words, it would probably be these: Embrace the obvious. Look at your job, Browne advises. You get ahead because of your experience, education, and common sense. Your job is the reason you have money to invest in the first place. So the first of Browne’s 17 rules is, “Build Your Wealth upon Your Career.” Don’t jeopardize your career; it’s going to take many years of smart investing before your earnings will surpass w…
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5.0 out of 5 stars
honest and fail-safe advice for investors like you and me – a must read
One rarely reads any investment advice or book this honest and straightforward, yet easy to understand and effective.
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.
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, emoneyf (mutual fund) managers and stockbrokers, who constantly tell us that they can predict the future using sophisticated eeconometricf 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-freef US Government Securities backed merely by the full faith and credit of the United States Government (I personally wonft 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 earned tomorrow. Throughout the book, Mr. Browne wants to remind the reader of three things. First, it is hard to earn a dollar, yet even in the face of this generally accepted truism, there are those who want you to believe that you can get rich quick simply by making bets based on their uninformed, though highly elaborate, predictions about unpredictable events. Second, you know more than the so-called eexpertsf want you to think you know. The experts want you to disregard your common sense and put your trust in their opinion. Third, in the world of investing, what goes up eventually comes down, and even more important, what goes down does not necessarily have to go back up. As Browne pointedly remarks over and over again, in the world of investing, nothing is supposed to happen, and anything can happen. As such, the last five of his seventeen rules can be summarized as: Sophisticated = Stupid and Simple = Smart.
Finally, for those of us, including myself, who feel as if they have missed out on the Greatest Bull Market of All Time, fear not, for there will be other opportunities. After all, the last Greatest Bull Market of All Time occurred just before the Great Crash of 1929. As Browne tells the reader at the end of the book, you are not a failure if you missed the boat. To this I must add: You are not a failure if you missed the boat- especially if the boat was the Titanic! I think there are a lot of bruised and broken investors from the New Era Internet Boom (and subsequent Bust) that will wholeheartedly agree with me, as the last six years have been their figurative Titanic. These individuals especially need to read, and re-read this book as they invest going forward.
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5.0 out of 5 stars
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.
…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 has garnered from thirty years of watching the rise and fall of markets – and he does so with his customary directness, clarity, and humility. He remains in a class by himself, and many of us will always be in his debt for the uncommon ideas he has expressed so ably. And above all for his own example – for the standard he has set.
5.0 out of 5 stars
Permanent Portfolio’s Explained
I found this book very interesting and insightful. It’s not really an “ABC” book to financing or anything, and I do think it’s probably good to have some idea of economics and…
5.0 out of 5 stars
A very good way to invest
Browne describes a sensible and simple plan for making money with your investments. I waited over a year to review this book so I could actually try his method and build my…
5.0 out of 5 stars
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…
5.0 out of 5 stars
A unique and worthwhile approach to long term passive investment
Harry Browne’s Permanent Portfolio concept is worth knowing about, and an interesting counterpoint to Ibbotson-style long term asset allocation.
5.0 out of 5 stars
helpful advice
I learned some good, basic investing advice. I will be a lot more skeptical about supposed new ways to make money in the market.
4.0 out of 5 stars
cute little book
The value of this book is in the nuggets of wisdom it contains. He stresses the importance of diversifying and not trying to predict the future.
4.0 out of 5 stars
Why I thought this was a good book
If you follow his advice, you won’t get rich. However, you will protect the purchasing power of your savings, no matter what happens to the markets.
4.0 out of 5 stars
Better Than Most Books on the Subject
Here’s a most unusual creature: an investment advisor who does not try to forecast the future nor sell you advice based on his prognostications.