Book Review

GLOBAL INVESTING MADE EASY

GLOBAL INVESTING MADE EASY

tshepisosishuba 2 years ago

About Author

Warren Ingram is a South African businessman, author and holds a B.Soc Sc (Economics) and a postgraduate Diploma in Financial Planning Institute’s and he’s a CFP professional. Warren is an Executive Director of Galileo Capital and he has been in the private client financial services industry since 1996.

Warren Ingram is an award-winning financial planner and respected personal finance commentator in the media. He was the South African Financial Planning Institute’s Financial Planner of the Year in 2011 and won their media award in 2013. Warren is a regular guest on 702 Radio and Cape Talk’s The Money Show with Bruce Whitfield.

He is the author of How To Make Your First Million and Become Your Own Financial advisor. He is now back with a new read called Global Investing Made Easy.

Book

The book was released in 2021, it covers all the main aspects that a non-financial person should know before embarking on a global investment journey and will be helpful to investors across the globe. People of all ages and levels of wealth will benefit from the practical, easy-to-understand, jargon-free information required to invest in the international markets, proving that financial freedom is possible for everyone. The book is relatively short having around 163 pages only.

Warren wrote this book during the Covid-19 pandemic, he says the reasons for writing this book were inspired by how “Donald trump made bad decisions in the USA’s early handling of the pandemic and the European Parliament’s dallying in securing vaccines for the citizens of its member states”.

Plot

This book layout is the same as the one of How To Make Your First Million, so if you enjoyed it you will enjoy this one too.

Here is a breakdown of the book or should I say a summary of it:

Chapter 1 to 4

What is your dream and vision?

In order to achieve financial freedom you need to make sacrifices now in order to reap the rewards in the future. This is what we call delayed gratification. It can be hard and tempting to stay on course which is why you need to have a dream and a vision. This will help you put things into perspective.

People who achieve financial freedom have an even clearer picture than a dream. They would have a very clear vision of exactly what they want from their financial goals. In the book, Warren highlights how you can create your own vision. When creating a vision for yourself, you need to try to make it real, attainable and detailed as possible.

Try to picture where you want to live? What type of how do you want? How often do you want to travel and which places do you want to visit? What type of car do you want to drive? When do you want to be in a position where you no longer need to work for a living? Do you see yourself working once you reach your financial goal? Having this type clarity will help you with planning your portfolio especially in international markets.

Finding your passion

Having a strong vision for your future is a powerful motivator but you also need a suitable vehicle to get there. That vehicle is your job or career that earns the money to achieve your financial goals. You need a balance between passion, skill and earning potential. Working on your passion with poor earning potential is not going to achieve your dreams. Working in a job you hate is going to make life miserable and won’t deliver your best work. You need to find that sweet spot in between.

Instead of finding your passion rather find something that you are passionate about and that you are good at. You can find this by a process of elimination.

This sage advice came from none other than Charlie Munger. When asked by a young investor how he could find his passion for a career. Munger said that you should start by excluding those jobs for which you have no talent or natural ability. This narrows the options, from there select what interests you and then finally considering which of them will suit your strengths. If you consider earning potential then you have another filter to narrow the choice.

Financial Freedom

He highlights that people are living longer compared to 100 years ago. He emphasizes that the retirement age of 65 makes no sense anymore. People are living longer and they are much healthier at age 65 than our grandparents were. He continues to make an example that Warren Buffet and Charlie Munger, who ran Berkshire Hathaway continued to work till their 90s. What’s stopping you?

In order to achieve financial freedom you need to take care of certain things such as getting out of debt, having an emergency fund and build an income generating assets that will pay for your lifestyle. For you to achieve financial freedom you don’t need to have tons of millions of money. Financial freeom and being wealth is not the same.

Financial freedom is when your income exceed your expenses. Financial freedom does not happen by accident. It is the result of a well-thought-out and executed plan.

Chapter 5 to 8

Investing 101

“The key to good investment decisions is to focus on factors that you can control. A sound understanding of how investments work is a good start.”

The basics of investing starts with building a sound foundation. That means that you eliminate debt and have an emergency fund. Without these, you may have the best investment plan but it comes crashing down when you have to sell everything to pay off your debt or cover an emergency.

“There are many similarities between building financial freedom and building a house: if you do not build your house in the right order, it will eventually collapse”

When you start building your investment portfolio, it is worth following these steps:

Step 1: Define your investment objective.

Step 2: Establish how much you can put away each month.

Step 3: Decide what assets to buy.

Step 4: Get started.

Step 5: Keep going!

He continues to share the basics of investing and breaking them down for us in a langue we can understand.

In this section he explains the importance of diversifying your investments not only in different asset classes but in different geographies. He further talks about managing your risk appetite and h

Inflation, Risk and Asset mix

He shares ways you can have your investment beat inflation. Best way to make sure your investments grow is by ensuring you invest in asset that are proven to have outperformed inflation in the past. What’s the use of keeping your money in a savings account if it’s just going to lose it’s buying power. He illustrates that coffee in 1970 was worth $0.25 and in 2020 was about $1.79. That means $0.25 has no purchase value that’s what inflation does.

This is why people need to invest so that their money can keep up with inflation and have the opportunity to enjoy life.

In order to have a fruitful investment you need to know that in your investment career you will experience some loses. That is way you need to manage your risk. He goes into detail on which questions to ask yourself to ensure that your investment does not only beat inflation but minimize your loses. Do you have a lump sump on money and you want to invest? He share how you can do that. Instead of putting it all of it in the market he suggest you phase it in, in order to minimize your risk.

Investing locally and internationally

International Investing

As I mentioned earlier this book is about global investing made easy yet most of it is about “normal” investing. I hope you can understand why this is so. Global investing is just one aspect of investing and not something that stands alone or is done in isolation. It all needs to be part of a well-thought-out strategy and plan to achieve your investment objectives. By not understanding the big picture you are setting yourself up for making some bad investment decisions.

International investing is always important but especially so when you live in a small country. The strange thing is investors always prefer to invest in their own market rather than take a global view. This behavior is called home bias and is common in all countries. Consider that the total world stock market size is 95 trillion dollars, South Africa is 1 trillion dollars. So only investing in SA means you are only exposed to 1% of the market. Being in the US you will be exposed to about 50% of the world market, still a clear bias.

Global Diversification

The main reason for home bias is that we always tend to invest in what we know. This is a good thing but it is not good for diversification and spreading risk or maximising growth opportunities.

Some of the reasons you would want to invest in international markets are

Avoid political risk
Access industries not present in your home market eg big pharma not in SA
Access markets that are different to your home market eg Japan vs US market correlation
Access higher growth economic regions eg emerging markets
Increase exposure to innovation
Access markets with more favourable valuations

Some other factors to consider that could go either way

Interest rate
Currency risks
Taxation

“Every investor should have a clear method for determining the ideal international proportion of their assets”

You will need to balance all these risks and consider how they will affect your portfolio over the long term. The worst thing to do is to let the short term volatility of these factors drive your decision. Instead you should have a proper plan and strategy.

Global Portfolio

So in the end international investing is another form of diversification. You would use the same asset classes like equities, bonds and property but they would be internationally based. You would need to consider the inherent risks and benefits of the asset classes and then the country or region risks and opportunities on top of that.

One of the best ways to do this is a Global World Market ETF. These ETFs cover the entire world so you get exactly the diversification you are looking for. The worldwide ETFs also have the biggest global companies in them. You don’t have to worry about knowing the dynamics of each country. You can buy these ETFs in your own country or via international brokers.

He share’s with us what his portfolio consists of. He had a significant portion of his portfolio in international investments. They were made up of MSCI World Index ETFs, emerging market ETFs and some global investment management companies.

Key lessons from the book:

Have a dream and vision: create a stepladder to achieve your goals
You don’t need a lot of money to achieve financial freedom
Before investing, pay off your debts, build an emergency fund then have your assets pay for your lifestyle.
Take advantage of the time, let compound interest do the work for you.
Your portfolio needs to be diversified, locally and internationally and in different assets.
Have a clear communication with your partner about your future plans
ETFs are the way to go.

This book consists of 14 chapters and I only share with you what stood out for me. From chapter 9 to 14, he shares two scenarios of how to retire with enough money and how to build generational wealth. He also discuses the dynamics of owning property for yourself and creating wealth from it.

He continues to talk about discussing finances with your partner and how to handle your relationship with money.

Do you need some motivation? He shares some wisdom of those who have done it before you. And explains some finance jargons for you.`

My Thoughts

Warren did it again, he gave us a banger of a book. He opened my eyes to new possibilities. Things to take into consideration when investing globally. I like how he highlighted inheritance tax and how to maneuver it.

The book also shows the importance of not only investing for yourself but for your loved ones also. He breaks down each chapter and goes into detail on how to implement his suggestions.

I think this book appeals to every person that wants to take their investing to another level. Keeping all your investments in one country no longer makes senses to me. It’s time we started diversifying our investments globally.

This book gives you an insight of what to expect when you invest globally,

What I did not like about the book is that it is structured like his other book, How To Make your First Million. However, the information he provided in those chapters do apply to global investing. Once you have read the book all together everything will fall into place

This is a book that deserves a place on your bookshelf! I enjoyed it and I hope you will enjoy it to.

Are you struggling with managing your money?

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Thank you for reading.

THE ALCHEMIST

THE ALCHEMIST

tshepisosishuba 3 years ago

About Author

Paulo Coelho was born in Rio de Janeiro, Brazil. In 1970, after deciding that law school was not for him, he traveled through much of South America, North Africa, Mexico, and Europe. Returning to Brazil after two years, he began a successful career as a popular songwriter. In 1974, he was imprisoned for a short time by the military dictatorship then ruling in Brazil.

He has written more than a dozen novels, including The Pilgrimage and Veronika Decides to Die, both of which are being adapted to film.

Coelho is an outspoken activist for peace and social justice, and also supports the free distribution of his work.

Book

In 1988, Coelho published The Alchemist, it was initially written and published in Portuguese. It is an international bestseller which has sold more than 150 million copies worldwide and has been translated to more than 70 languages.

The book is relatively short having around 167 pages only. The theme is about finding one’s destiny or purpose in life.

Plot

A recurring dream troubles Santiago, a young and adventurous Andalusian shepherd. He has the dream every time he sleeps under a sycamore tree that grows out of the ruins of a church. During the dream, a child tells him to seek treasure at the foot of the Egyptian pyramids. Santiago consults a gypsy woman to interpret the dream, and to his surprise she tells him to go to Egypt.

A strange, magical old man named Melchizedek, who claims to be the King of Salem, echoes the gypsy’s advice and tells Santiago that it is his Personal Legend to journey to the pyramids. Melchizedek convinces Santiago to sell his flock and set off to Tangier.

When Santiago arrives in Tangier, a thief robs him, forcing him to find work with a local crystal merchant. The conservative and kindly merchant teaches Santiago several lessons, and Santiago encourages the merchant to take risks with his business. The risks pay off, and Santiago becomes a rich man in just a year.

Santiago decides to cash in his earnings and continue pursuing his Personal Legend: to find treasure at the pyramids. He joins a caravan crossing the Sahara desert toward Egypt and meets an Englishman who is studying to become an alchemist. He learns a lot from the Englishman during the journey. For one, he learns that the secret of alchemy is written on a stone called the Emerald Tablet.

The ultimate creation of alchemy is the Master Work, which consists of a solid called the Philosophers Stone that can turn lead to gold, and a liquid called the Elixir of Life that can cure all ills. Santiago learns the Englishman is traveling with the caravan to the Saharan oasis of Al-Fayoum, where a powerful, 200-year-old alchemist resides. The Englishman plans to ask the alchemist the secret of his trade.

As it turns out, the caravan must make an extended stop in Al-Fayoum in order to avoid increasingly violent tribal wars taking place in the desert. There, Santiago falls in love with Fatima, who lives at the oasis. During a walk in the desert, Santiago witnesses an omen that portends an attack on the historically neutral oasis.

He warns the tribal chieftains of the attack, and as a result, Al-Fayoum successfully defends itself against the assault. The alchemist gets word of Santiago’s vision and invites Santiago on a trip into the desert, during which he teaches Santiago about the importance of listening to his heart and pursuing his Personal Legend.

He convinces Santiago to leave Fatima and the caravan for the time to finish his journey to the pyramids, and he offers to accompany Santiago on the next leg of his trip.

While the alchemist and Santiago continue through the desert, the alchemist shares much of his wisdom about the Soul of the World. They are mere days away from the pyramids when a tribe of Arab soldiers captures them. In exchange for his life and the life of Santiago, the alchemist hands over to the tribe all of Santiago’s money and tells the soldiers that Santiago is a powerful alchemist who will turn into wind within three days.

Santiago feels alarmed because he has no idea how to turn into the wind, and over the next three days he contemplates the desert. On the third day, he communicates with the wind and the sun and coaxes them to help him create a tremendous sandstorm.

He prays to the Hand That Wrote All, and at the height of the storm he disappears. He reappears on the other side of the camp, and the tribesmen, awed by the power of the storm and by Santiago’s ability, let him and the alchemist go free.

The alchemist continues to travel with Santiago as far as a Coptic monastery several hours from the pyramids. There, he demonstrates to Santiago his ability to turn lead into gold using the Philosopher’s Stone. He gives Santiago gold and sends him off.

Santiago begins digging for the treasure at the foot of the pyramids, but two men accost him and beat him. When Santiago speaks to them about his dream vision, they decide he must have no money and let him live. Before leaving, one of the men tries to illustrate the worthlessness of dreams by telling Santiago about his own dream. It concerns a treasure buried in an abandoned church in Spain where a sycamore tree grows.

The church is the same one in which Santiago had his original dream, and he finally understands where his treasure is. He returns to Spain to find a chest of jewels and gold buried under the tree, and plans to return with it to Al-Fayoum, where he will reunite with Fatima, who awaits him.

Key lessons from the book:

The pursuit of your personal legend The idea is that each person has a “Personal Legend”—a type of ideal fate or destiny—and that each person can chose whether or not to pursue that legend.

Fear is a bigger obstacle than the obstacle itself
“Tell your heart that the fear of suffering is worse than the suffering itself. And that no heart has ever suffered when it goes in search of its dreams, because every second of the search is a second’s encounter with God and with eternity.”
Any new pursuit requires entering uncharted territory — that’s scary. But with any great risk comes great reward. The experiences you gain in pursuing your dream will make it all worthwhile.

Focus on your own journey
“If someone isn’t what others want them to be, the others become angry. Everyone seems to have a clear idea of how other people should lead their lives, but none about his or her own.”
It’s easy to be influenced by others, but you’ll be miserable if you end up living someone else’s life. There’s nothing wrong with taking advice and learning from others, but make sure it aligns with your desires and passions.

Embrace the present
“Because I don’t live in either my past or my future. I’m interested only in the present. If you can concentrate always on the present, you’ll be a happy man.”
There’s no point dwelling in the past and letting it define you, nor getting lost and anxious about the future. But in the present moment, you’re in the field of possibility — how you engage with the present moment will direct your life.

What is “true” will always endure
“If what one finds is made of pure matter, it will never spoil. And one can always come back. If what you had found was only a moment of light, like the explosion of a star, you would find nothing on your return.”
Truth cannot be veiled by smoke and mirrors — it will always stand firm. When you’re searching for the “right” decision, it will be the one that withstands the tests of time and the weight of scrutiny.

My Thoughts

The Alchemist is a fantastic book and the storytelling is beautiful. The choice of words are impeccable, full of wisdom and philosophy . The story is very enchanting and bursts with optimism which I think is very important in our lives.

The also book shows that the journey to your destiny is as important as the destiny itself. I love how the book emphasizes on the importance of faith, hope and spirituality through the story of an ordinary boy.

I think this book appeals to everyone because we all have dreams and sometimes we just want someone to tell us that they may come true. Overall,” The Alchemist” is a very exciting fiction novel and it deserves a space at everyone’s bookshelf.

The point of this book is that people go around the world looking for something and after living and learning they realize they had it within them the whole time. However, they would have never known this, had they not experienced life.

This book is for anyone who reads not only to escape reality but also to understand reality, The Alchemist can offer the best of both worlds. The events of the novel sit just on the borderline of miraculous and the ambience is simply just not that of our humdrum teenage world.

However, The Alchemist also supplies insight and inspiration that extends beyond Santiago’s Sahara and into all lives, whether young, old, or teenage. The Alchemist may not be your regular fiction book, but it most definitely still deserves a place on your bookshelf!