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The Shortest Investment Book Ever by James O’Donnell

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The Shortest Investment Book Ever: Wall Street Secrets for Making Every Dollar Count by James O'DonnellI really liked The Shortest Investment Book Ever: Wall Street Secrets for Making Every Dollar Count by James O’Donnell because it was concise and to the point, not overly wordy. The book isn’t a thick tome designed to overwhelm you into thinking you are getting your money’s worth, it’s about a hundred and fifty five pages broken up into eighteen chapters, each of which probably take about 10 minutes to read. You would think it’s impossible to cover everything in investing in 155 pages and you’re right, he covers all the basics 99% of investors will need. He writes about various account types like 401(k)s and IRAs, he writes about diversification, he writes about the importance of time, he writes about life cycle funds, he writes about investing with a conscience, he writes about re-balancing, he writes about annuities, etc. He doesn’t discuss more advanced topics like investing in commodities or buying options and futures, but for 99% of individuals that stuff won’t matter.

In The Shortest Investment Book Ever, O’Donnell takes a different approach to the topics of investment, retirement, etc. He tries to keep things short while comprehensive, understandable yet complete; it’s not an entirely novel approach but I think he produces a solid investment book without inundating you with charts and graphs (there isn’t a single one of either), which is a staple in investment books. If you want a rigorous look at investing with a lot of statistics and data, this isn’t the book for you. If you are intimidated by investing, because you think it’s all about standard deviations and technical jargon, this is a good introduction that will get you off your butt with regard to investing.

About James O’Donnell

James O’Donnell is an associate professor of business and economics at Huntington University, located in Huntington, Indiana and named #65 on Forbes’ list of America’s Best Colleges. You might be wondering what qualifies an associate professor to give investment advice? Well, O’Donnell has worked in the finance services business for decades, going all the way to 1981 when he was VP and national sales manager for Dreyfus Service Corp. After a four year stint at Dreyfus, he spent the next four at Portfolio Group, Inc. where he increased assets under management from $800M to $2.5B. Then, he went to Fidelity Investments, eventually becoming an executive vice president and founding directory of the High Net Worth Group. He knows his stuff.

About The Shortest Investment Book Ever

The entire book has a feeling of a conversation, almost one on one with O’Donnell. It begins with him explaining the realities of retirement and investing. The realities of retirement today is that you cannot depend on Social Security, you will run a significant risk of outliving your savings, and you will also likely underestimate how much you will spend while in retirement. Those are just three of several reasons he cites and those are well understood ideas in the financial planning world, they’re just not well understood by many outside of that world. So what now?

Stop spending, start saving. Where do you start saving? You can start with life cycle funds. Chapter 3 is titled “Wait A Minute — You May Already Be Done With This Book: The Case for Lifecycle funds” and it starts on page 23. The next chapter is about diversification, then there’s one about the importance of time and compounding, and then there’s one about rules of thumb. As I mentioned earlier, each chapter is about ten minutes long (which makes it an easy read, you can put it down and return to it easily) and I bet you can finish the book in only a couple of hours.

I think this book is perfect for someone who knows absolutely nothing about retirement and investing and wants to learn but is easily discouraged by an avalanche of data, charts, graphs, etc. It’s only a hundred and fifty pages, so readers aren’t intimidated and the chapters are short, which means you won’t give up on reading it. I know a lot of people who are smart enough to figure out investing but really don’t want to chew threw a book with lots of facts and figures, this is a great book for them. Again, if you want a lot of numbers, lots of analysis (like Random Walk on Wall Street type books), then you’ll want to pass on this.

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2 Responses to “The Shortest Investment Book Ever by James O’Donnell”

  1. Jim,
    I’m curious. Does he mention anything about the costs of life cycle funds?
    Also, does he make any suggestions as to where to find a low-cost life cycle fund?
    Thanks,
    Tyler

    • jim says:

      Yes, he says that they aren’t as diversified as they should be, they don’t expose you to all the non-stock-like investments. He also warns about fees, to find one with low fees (0.5%). He lists a few of them in the appendix.


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