Book Review: Three Simple Rules of Investing

I recently read the short and simple book, The 3 Simple Rules of Investing, by Michael Edesess, Kwok L. Tsui, Carol Fabbri, and George Peacock. Michael Edesess is a friend, and this book deserves a longer review. It includes a lot of interesting insights into basic problems or misinterpretations with a number of published and well-cited academic finance articles. But I realize that I will probably never get around to writing such a review.

Instead, let me share a few slides excerpted from a presentation I recently prepared and gave to an audience of individuals who are still in the process of learning about the basics of investing.  It was not my usual  audience, and this book came in very helpful in cutting down investing to its essence. In particular, I really liked how the book reduced the retirement income investment problem into considering allocations to three basic sources: the world stock index fund, a ladder of individual bonds (preferably TIPS), and income annuities. It can really be that simple.

Here are the excerpted slides which tell the basic story from the book in a way that I found very helpful as an educational tool: