Investing for Baby Boomers – A Book Review

“You’re Fifty – Now What?  Investing for the Second Half of Your Life” (Charles R. Schwab)

I admit it, I’m a baby boomer.  That means I read books with words like “fifty” in the title, including this one.  It could have been titled “Investing for Baby Boomers” (as I’ve listed it in the title of this post) because that is the essential focus of the book.  I suppose my title just doesn’t have enough “pop.”   The title tag line is a good one because I feel like I truly am in the second half of my life.  (Mathematically I’m probably more than half-way through, at least of the parts that I will remember!)

Why I Read this Book

OK, first a disclaimer.  I didn’t technically “read” this book.  I listened to it.  I found the audio CD version (five CD’s) at our local library.  I noted right away that it was published in 2000, so that had me concerned that the content would be dated.  On the positive side, I saw that it was written by Charles R. Schwab.  I was intrigued by that because I knew that he was a successful investor and brokerage owner.  I had never read anything of his so I was curious about his personal investing and retirement planning strategies.  I figured what the heck,  I could listen to it in my car, going back and forth to work.   So that’s what I did.

Who This Book is For (Not Just Baby Boomers)

Obviously, the book is intended for investors over the age of 50.  (Duh)  But after reading it, I will add that “investing for the second half of your life” probably should start earlier.  It could also be called “investing for accumulation” because that is what Schwab wants us to do – aggressively invest to accumulate wealth for when we aren’t working so hard.  Let me emphasize the word “aggressive” because in this book, Charles Schwab is big time pushing growth stocks as the investing vehicle of choice.  I’m talking a very high percentage of growth stocks, much higher than most other personal finance writers would recommend for the over-fifty crowd.  That makes the book a good read for younger investors as well.

This book is probably not for the sophisticated investor.  By “sophisticated” I do not mean having lots of money to invest.  I mean an investor who knows where his or her money is invested and why.  Unfortunately, there are lots of boomers and others who turn their portfolios over to wealth managers and advisors and then really don’t pay any attention after that, except to the bottom line.  That is not a sophisticated investor.  That is a reckless investor.

What this Book Covers

Being a book intended to introduce folks to lots of financial planning areas, the book starts with a discussion on investing and retirement planning philosophy.  It explains the different asset categories and what role each should play in an investors portfolio, both to grow the portfolio and to generate income.  But let’s be clear – Schwab is a growth guy.  He doesn’t even like high yield dividend stocks.  He wants baby boomers – all investors really – to focus on funds and stocks that provide the potential for high growth.  Not much data to support it – just Schwab’s personal experience.

Investing “Core and Explore”

Schwab uses this phrase a lot in the book.  I kind of like it myself actually.  It refers to Schwab’s belief that a long term investor should have a core set of mutual funds, usually indexed funds, that provide the core growth potential for the portfolio.  He then urges us to “explore” beyond this core by finding actively managed funds and stocks in different asset categories that provide even greater growth potential.  By making this recommendation, Schwab places a lot of trust in his readers that we will take the time to carefully do the research for these “explore” holdings.  He may be forgetting that we do not employ legions of analysts to do this research for us.  Overall, though, it’s a nice concept to consider.

Beyond Stocks, Bonds, and Mutual Funds

A nice feature of this book is that Schwab moves beyond the pure investing arena into other areas.  Those include disability insurance, life insurance, estate planning, how to select an advisor, and even charitable giving.  It is apparent that he has a great deal of knowledge in each of these areas, and provides enough of that knowledge to get the reader at least thinking about the subjects.

What is particularly helpful about the content is that Schwab obviously has a passion for what he is talking about.  He works hard to inject that passion into his words and to keep the book from devolving into a world of pure dollars and cents.  He genuinely wants the readers to invest and plan for their lives and for the lives of those around them.   I should add here that except for brief opening and closing remarks, Schwab does not read his book to us.  He uses a professional actor who has a great voice and knows how to keep listeners from falling asleep.

Should You Read this Book?

If you are a baby boomer, or even in your 30’s or 40’s, this book is definitely worth your time and effort.  If you are already knowledgeable in the areas of personal finance, investing, and retirement planning, this would not be a “must have” read.  However, if you are like me, and have commuting time on your hands, then I still recommend that you at least borrow or buy the audio CD version.  If you can’t find it at your local library, they are available new and used at Amazon and other retailers at discount prices.  At the very least, you can say you’ve listened and learned from Charles Schwab.  Nothing wrong with that.

Now please excuse me as this baby boomer must return to living the second half of my life.

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