The Coffeehouse Investor

Lately I have been reading more financial related books given influence from a good friend of mine and a penchant to take risks. I found this book (The Coffeehouse Investor) a few weeks ago and browsed it in the store. While it caught my interest I did not purchase it until last week. Once I did, I read it in 2 days. Then I reread a lot of it. Then I browsed it again and took notes. I love its cheap price and given how much it will help my personal investing - it just might be the best buy I ever made. I love this book so much, I plan on giving it away to family and friends this upcoming holiday (and wedding) season!

The book is centered around 3 themes:

Don't put all your eggs in one basket
There is no such thing as a free lunch
Save for a rainy day

He gives three principles of investing:

Asset allocation - Where you put your money (cash/bonds/stocks); how much in each (per your risk level/age); the author has good examples
Approximate the stock market average (this is what struck me as genius) - he gives so much evidence of smart people failing to beat the market over time; this combined with the influence of another book I am reading (The Black Swan) - just really speaks volumes to me! Investing this way will help avoid pitfalls of black swan events. I have been convinced this is the only way to go for those of us who invest for retirement and not for a job.
Saving - He puts an easy to use worksheet on p90 that simplifies out how much to invest monthly to retire well. Simple. Amazing. Awesome!

Favorite quotes from the book include:

...but there is a little voice inside me that says four hours of television a day will not help me in my journey toward discovering my talents and passions and living a healthy and productive life. (p15)
Sometimes you have to make a conscious decision to have fun, because if you don't, it quickly becomes the most miserable experience of your life. (p81)
...I was addicted to the clutter of everyday life, and it finally dawned on me that the clutter in my life might be keeping me from pursuing my dreams and living a life i would choose to live if given a chance to do it all over again. (p84)
It is not worth making your life miserable today so you can retire in style tomorrow. (p88)
The less you pay in expenses and taxes, the better off you are. (p98)
Nothing is worse than wasting your life away at something that leaves you unfulfilled. (p178)

Somewhere in the book he makes a comment (and I cannot seem to find it again since reading it) where he states investing in the market is believing in our country's innovation and creativity. Simply the Truth.

Lastly, for those of us who enjoy doing our own swing trades, there is a chapter on "having fun" though peppered heavily with the massive pitfalls we are likely to encounter ;)

My distractions

The Coffeehouse Investor

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