During the financial crisis of 2008, things got scary. Large Wall Street firms were going under, stock prices were plummeting, and layoffs and unemployment rates were soaring. And all this was happening in the midst of the 2008 presidential election. Talk of another Great Depression was in the air. In fact, polls showed a majority of Americans feared that another depression was actually happening. Housing prices were dropping sharply in most communities, and more and more properties were ending up in foreclosure.
Investing didn’t seem so fun anymore. However, even though the downturn was the worst in decades, it had similarities to prior downturns, and people who kept their sense of perspective have enjoyed tremendous returns since the market bottom.
I know from working with people of modest and immodest economic means that the time-tested ways they increase their wealth are by doing the following:
- Living within their means and systematically saving and investing money, ideally in a tax-favored manner
- Buying and holding a diversified portfolio of stocks
- Building their own small business
- Investing in real estate
This book explains each of these wealth boosters in detail. Equally if not more important, however, is the information I provide to help you understand and choose investments compatible with your personal and financial goals.
About This Book
The best investment vehicles for building wealth — stocks, real estate, and small business — haven’t changed. But you still need money to play in the investment world. Like the first edition of Investing For Dummies, the seventh edition of this national bestseller includes complete coverage of these wealth building investments as well as other common investments, such as bonds. Here are the biggest changes in this edition:
- I’ve freshened up the data and examples in this book to provide you the latest insights and analyses. Having trouble comprehending what “quantitative easing” is and whether the Federal Reserve’s ending it will upset the stock market? Confused about how tax law changes should affect your investment strategies? Wondering about using an advisor to invest in funds that only he can access? Seeking a way to invest in stocks without exposing yourself to the tremendous risks experienced during the financial crisis of the late 2000s? Curious about what an exchange-traded fund (ETF) or hedge fund is and whether you should invest in one? Wondering how to use leveraged ETFs to boost your portfolio’s return? Weighing whether and where to invest in real estate given current market conditions and the severe downturn in the late 2000s? Wondering what the best ways are to invest globally? Having trouble making sense of various economic indicators and what they mean to your investment strategy? Wanting to invest in a Health Savings Account (HSA) but don’t know why, where, or how? You can find the answers to these questions and many more in this edition.
- I offer more information on investing resources. With the continued growth in websites, software, print publications, media outlets, and other sources of investing advice and information, you’re probably overwhelmed in choosing among the numerous investing research tools and resources. Equally problematic is figuring out who you can trust and who you need to ignore. So many pundits and prognosticators claim excellent track records for their past predictions, but who, really, can you believe? I explain how to evaluate the quality of current investment tools and resources, and I provide tips on deciding who to listen to and who to tune out.
To build wealth, you don’t need a fancy college or graduate-school degree, and you don’t need a rich dad (or mom), biological or adopted! What you do need is a desire to read and practice the many simple yet powerful lessons and strategies in this book.
Seriously, investing intelligently isn’t rocket science. By all means, if you’re dealing with a complicated, atypical issue, get quality professional help. But educate yourself first. Hiring someone is dangerous if you’re financially challenged. If you do decide to hire someone, you’ll be much better prepared if you educate yourself. Doing so can also help you focus your questions and assess that person’s competence.