“Worry-Free Investing” Book Review, Part 2

This is the second part of a review of the book “Worry-Free Investing”, by Zvi Bodie and Michael J. Clowes. This review began here.

Once we factor out the heavy emphasis on low-risk (and low return) investing, this book contains a vast amount of useful unbiased information. For example, Chapter 3 shows how to plan for retirement including figuring out how much money you will need to retire, minimizing taxes, and minimizing investment fees.

Chapter 4 covers saving for college. The cost of education beyond high school has been rising faster than inflation for some time. Whether this will continue is anyone’s guess. The authors discuss the many different college savings plans available in the U.S.

In Chapter 5, the authors discuss investing in a home and the various ways a home can be turned into a retirement asset including a reverse mortgage. There are many things to consider when it comes to reverse mortgages, and the authors do a good job of explaining them.

Chapters 8 through 13 contain a wide range of other useful information. Topics include investing myths, the steps to take in making a financial plan, the nature of financial advisors, and the benefits of index funds over actively-managed mutual funds (see here for more information on this last topic). The book also lists web sites that provide accurate unbiased financial information.

In part 3 of this book review, we examine the authors’ argument against investing in stocks.