Book Review – The Value of Simple

One mistake I always make when it comes to talking about personal finance and investing is that I often think that if I can convince people of the merits of a certain path or strategy, they will then follow that path and enjoy the fruits of their new knowledge.  Of course that completely ignores the massive mental blocks we erect when it comes to executing strategies that require change in any field or subject area.  In our current age of unparalleled information density many of us tend to drift into “paralysis by analysis mode” and just keep reading about stuff instead of actually implementing the strategies we’re learning about.  It’s relatively easy to tell yourself, “Oh, I’ll just read a few more blog posts or news articles about something before I get off my couch and fund that Questrade or Wealthsimple investing account.”  There is always next weekend after all.

John Robertson, known as Holy Potato to the online personal finance community, seeks to bridge this implementation gap with his newest offering under the appealing name The Value of Simple – A Practical Guide to Taking the Complexity Out of Investing.  He seeks to explain how, “Investing really can be easy, and I mean actually easy, not like dieting easy where they say it’s easy – “just eat less” – but hard to actually pull off in practice.”

Who Is This Guy?

The Value of SimpleThe first thing you should know about John is that he is smart.  Not like, “Man, my friend gets the odd Jeopardy question right” smart, but “I have a PhD in Medical Biophysics” smart.  But not all smart people are good at personal finance (very little correlation oddly enough) and it’s even more rare to find a really smart person who is good at explaining personal finance.

If you want proof that John is the real deal check out his blog or simply use Google to find some of his comments on this site.  When “Holy Potato” comments on one of my article the end result is that 6 replies later I have learned something about an area I thought I was pretty close to being an expert in and readers who were patient enough to scroll through the exchange have gleaned as much information from the comments section as from the article itself!

Don’t You Have About a Book About This Simple Investing Stuff?

Yes we have a free eBook book about simple index investing using ETFs.  Apparently great minds (John’s) and slightly-above-average-on-a-good-day minds (yours truly) think alike.

To be honest, you’ll find the first half of John’s book pretty similar to ours.  We both talk about why cutting fees are so important for Canadian investors, why stock-picking and mutual funds are usually bad ideas, and why passive index investing is the way to go for most folks.  John also explains how compound interest works (using a pretty entertaining “reproducing like bunnies” metaphor) and sheds some light on investing basics such as asset allocations and Canadian tax-advantage accounts.

The Valuable Part of The Value of Simple

All of that other stuff is good, but you can get it in several different places for free.  Fortunately there is so much other awesome stuff that makes this book a great buy.  Here are my personal highlights:

  • Very handy little chart that compares the characteristics of mutual funds, index mutual funds (commonly referred to as “index funds” for simplicity’s sake), and ETFs.
  • A great look at John’s own portfolio allocations (not specific numbers but percentages). This provides a great example for looking at how a person needs to consider all of their different investing accounts including their TFSA, RRSP, RESP, and non-registered accounts as well as how John re-balances them all from time to time in a very efficient manner.
  • The runner-up for my favorite chapter of the book is titled “Breaking Up is Surprisingly Easy to Do”. It’s about how to cut the cord with your commissioned salesperson financial advisor and how to combat some of the common BS that is often thrown at people who want to start DIY index investing.  Sales people have training specifically to mislead people by showing statistics without context, making statements that sound plausible but are actually completely false, and way overvaluing what they offer.  John explains why he’s a big fan of fee-only advice and I completely agree.  He even looks at how to exit out of mutual fund investments without taking a big hit on early withdrawal penalties that were designed by the mutual fund companies to keep Canadians in a state of inertia about their investment portfolio.
  • John wants to help you execute the simple strategies we both advocate for so badly, that he even provides illustrative screen shots to help you navigate through investment accounts and various different types of statements you might interact with.

The Best Part – Where and How

If passive index investing is the “what” that most Canadians badly need to know, John is one of the only authors out there right now that explains to Canadians exactly how to implement these passive strategies and where the three best options can be found specifically in Canada.

This is the best and most unique part of the book.  I completely agree with John’s choices for where to steer Canadian investors.  In no particular order he recommends:

  1. Tangerine’s Turn-Key Accounts Indexed Accounts
  2. TD’s eSeries Index Funds
  3. Index ETFs from Questrade
  4. Canada's robo advisors

He compares each of these options in depth, explains which options might be best for various types of investors, and explains how to use each one in a step-by-step manner.

It’s important to note that each of these three investing options uses passive index investing strategies that both John and I are big fans of, they are just different ways of going about it.  You won’t find a better illustration of exactly how to begin your investing journey.  If you’re new to investing or are convinced passive index investing is the way to go and just need a final piece of the puzzle, this is a great resource that shouldn’t be missing from your library.

We are giving away one paperback copy of this book as well as an electronic version. To enter in this giveaway please share this article and comment below and we will be picking 2 people at random. Winners will be contacted be email.

25 Comments

  1. Mr. Captain Cash on December 22, 2014 at 3:40 pm

    YAT,

    I am also use passive index investment strategies for my portfolio. Have had great results so far. Have you read MoneySense “Guide To The Perfect Portfolio” By Dan Bortolotti? I’ll have to put this book on my reading list and check out in the near future.

    Thanks,

    Mr. Captain Cash



  2. Kyle on December 22, 2014 at 3:49 pm

    Yah, I’m a longtime Dan Bortlotti guy. Check out his blog over at the Canadian Couch Potato if you’re interested.



  3. Yvonne on December 22, 2014 at 6:42 pm

    I’m new to investing and would love a copy.



  4. Karen on December 23, 2014 at 3:26 pm

    I had recently taken an Investing for Beginners Course and my instructor had mentioned this book was a great read. Even if I don’t win a copy, I’ll most likely end up buying the book. I don’t normally buy paperback books, but I think books about investing are good books to have at hand for reference.



  5. matt on December 23, 2014 at 5:17 pm

    I’d love a copy!



  6. Liquid on December 24, 2014 at 8:45 am

    Great review. I’m a big fan of passive investing and would love a copy of the book.



  7. Kyle on December 24, 2014 at 9:28 am

    Hey Karen, what sort of course was it if you don’t mind me asking? Who provided it etc?



  8. Sean on December 24, 2014 at 6:24 pm

    Great article. Look forward to reading the book!



  9. KC on December 27, 2014 at 6:22 pm

    Great review. I’m looking forward to checking out that book. Free copy, please!



  10. Potato on December 28, 2014 at 1:27 am

    Thanks for the review (and the blurb) Kyle!

    The course Karen took would have been Ellen Roseman’s one at UofT (she was kind enough to mention the book at some point in the class).



  11. Kyle on December 28, 2014 at 9:58 am

    I thought it likely was. Ellen is a beauty, if only we had 50 more like her across Canada advocating for people to take control of stuff. No problem on the blurb, we’ll chat soon!



  12. Carolyn on December 28, 2014 at 10:51 am

    I have TD eSeries Index Fund and would love know the other options so that I can tell the difference to others who are interested in investing.

    I managed to ask and help a friend to open a TD eSeries. In the next year I hope to share more of what I learn through this blog, books, podcast, and more blogs!



  13. Londoner on December 28, 2014 at 11:53 am

    Great article. We are thinking of breaking up with our ‘advisor’ and this book will set us on the right path to DIY investing.



  14. Lori on December 28, 2014 at 1:12 pm

    Always looking for new investing information. Would love to win the book.



  15. susan on December 28, 2014 at 1:31 pm

    Hi. thank you for reviewing this book. I have your beer and textbooks. I am very interested in learning about Index funds. I presently use TD waterhouse, but want to branch out to. Best of Luck.



  16. Nick Bachusky on December 28, 2014 at 2:13 pm

    This is a great review and I will be recommending this book as well as your ebook to more of my clients!



  17. Kyle on December 28, 2014 at 4:30 pm

    Great stuff Susan! If you have any questions don’t be afraid to ask!



  18. Kyle on December 28, 2014 at 4:30 pm

    That’s the spirit Londoner!



  19. Kyle on December 28, 2014 at 4:31 pm

    Kudos to you Carolyn! If you have any questions don’t be afraid to ask.



  20. Rajan on December 28, 2014 at 8:56 pm

    Kyle. For last little while, I have been reading about the benefits of passive investing. I have read your ebook(thanks!) also but still not very clear regarding how to implement the strategy. May be winning the book will give me the answers I am looking for.
    Rajan



  21. dennis on December 31, 2014 at 9:11 am

    2015 is the year that changes happen for me and investing and this article is so timely. Sounds like a great concept and read.



  22. Sandy on December 31, 2014 at 5:15 pm

    I have the TD Index Funds. I only learned about it few months earlier, but I’m also interested in learning more about other types of investments.



  23. Kyle on January 1, 2015 at 11:29 am

    Then this is the book for you Sandy! If you already believe in the principles of index investing this will solidify your convictions and help you actually implement your strategy.



  24. Howard on January 11, 2015 at 6:43 pm

    Is the free book still available?



  25. Kyle on January 12, 2015 at 7:34 am

    Sorry Howard we did the draw! Head over to the link and maybe you and John can work something out on an ebook!



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