A Review of Larry Swedroe’s “The Only Guide You’ll Ever Need for the Right Financial Plan”

I received a copy of Larry’s latest book, The Only Guide You’ll Ever Need for the Right Financial Plan*, a week or so ago. This book is a part of his “The Only Guide” series (see bottom of post for list). In fact, the book refers the reader to the other books in the series. Although this is a tad annoying it makes sense in that it would be silly to reprint all that information in a new book.

Here’s a brief look at the book:

Part I Looks at investment strategy in an uncertain world. Chapter 2 is dedicated to the importance and creation of your investment policy statement. I would have preferred Larry spending more time on the IPS—perhaps giving an example or two of different statements or even a sample worksheet to help aid the reader in putting together their own IPS.

Part II is the meat and potatoes of the book: asset allocation. Part II has chapters dedicated to asset allocation in general, equities, fixed income, alternative investments, and liabilties and asset allocation. I really liked these chapters, particularly the chapter on alternative investments because Larry gives recommendations on whether or not each asset should be a part of most investors’s portfolios. Of the nineteen alternative investments discussed, only one of them get’s Larry’s recommendation (EE Bonds).

I also liked the chapter on equities because Larry lays out reasons why an investor would want to increase or decrease their equity exposure. Among the reasons to increase equity exposure:

• Longer time horizon

• High tolerance for risk (I prefer to call it volatility)

• High marginal utility for wealth (a technical way of saying that an increase in wealth is important to you)

Part III is about implementing the plan. It looks at things like whether or not to use individual stocks or mutual funds, active vs. passive management, where to hold assets, and portfolio maintenance.

Part IV addresses all the other areas of planning. Things like college savings plans, insurance, IRAs and retirement plans, social security, safe withdrawal ratess, and estate planning. The most interesting chapter in Part IV (in my opinion) was the one addressing safe withdrawal rates. Larry’s discussion of the usefulness of Monte Carlo simulations was interesting (and food for future AFM blog posts).

The book closes with several helpful Appendices that look at diversification, dollar cost averaging, reverse mortgages, and how to choose an advisor.

Overall, this is a great resource for everyone (beginner and those who are further down the investing and planning road).

Related books (affiliate links):

Wise Investing Made Simpler (Second in a series)

The Only Guide to a Winning Investment Strategy You’ll Ever Need: The Way Smart Money Invests Today

The Only Guide to a Winning Bond Strategy You’ll Ever Need: The Way Smart Money Preserves Wealth Today

The Only Guide to Alternative Investments You’ll Ever Need: The Good, the Flawed, the Bad, and the Ugly (Bloomberg)

*Affiliate Link