Learn to Earn: A Beginner’s Guide to the Basics of Investing and Business - Lynch
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My recommendation: 8/10
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Summary of notes and ideas
Absolut classic as Peter Lynch has had one of the best investing records in the industry in the 80ies and 90ies while he ran the Medallian Fund.
I read the book although the title says it’s for beginners. Still, I enjoyed the book. If you are not that familiar with books from Peter Lynch, I’d recommend it.
Copying notes from Scribd isn’t super easy, hence, why I quote some notes from this source:
One: A Short History of Capitalism
This first chapter is a ninety page history of the development of business and stock investing in the United States, starting clear back with the Pilgrims. Honestly, this is not material I expected from this book, but it turned out to be incredibly compelling. I got engrossed in this portion of the book, taking about ten notes on every page and turning to Wikipedia and to other sources many, many times during the reading to increase my understanding of what Lynch was describing.
Some are obviously going to ask what purpose this section serves. It doesn’t teach much directly about how to manage your money today. Instead, it puts investing, money management, and other basic elements of personal finance into the context of American history. For many people, the obvious question will be “Why read it?” and for some the answer will be obvious. Personal finance, as we know it today, is the outgrowth of thousands of years of hard work by our ancestors, and along the way they learned mountains of valuable lessons. Those lessons, sadly, are often ignored and their mistakes are still repeated today: deep personal indebtedness, following a herd mentality when investing, getting involved in complex business schemes without any idea of how they work. All of those things happened time and time again in the past, and they happen again today.
The value here is to show, in a very interesting and authentically American way, that the basic tenets of personal finance have always been true. Always spend less than you earn. Never invest in things that you don’t understand. Never just blindly repeat the investment strategy of the people at the country club. Always plan for bad news in the future. Hard work, intelligence, and diligence almost always pay off. These tenets work – they’ve worked over and over again throughout American history.
Two: The Basics of Investing
This chapter really breaks down into three parts. The first part is incredibly simple: spend less than you earn, do it now, and invest the remainder. This is basically a commandment in this book and for good reason – following it is pretty much the only sure way to financial success.
The second portion outlines the five places where most people can put their money: cash (savings accounts, CDs, foreign funds), collectibles (including metals), real estate, bonds, and stocks. Lynch is obviously a stock investing advocate, but he does a good job outlining the other areas of investing as well. In general, he recognizes cash and bonds to be relatively safe, seems to not like real estate investing much at all (too much manual work and too much risk), and finds collectibles to generally be far too speculative.
The rest of the chapter focuses on stock investing, where Lynch is an expert. There really is a lot of good advice in this section, much too dense to really discuss in detail. Lynch (and Rothchild, who I suspect is probably the ghostwriter at least to a degree) is very good at making this information breezy, so the forty five pages or so that discuss stock investing are simultaneously quite informative and very readable. If Lynch’s more stock-oriented books are similarly readable, I look forward to reading them.
It’s important to note that Lynch assumes the reader doesn’t have much knowledge at all about the stock market. It is written from a beginner’s perspective – if you want detailed info on how to pick stocks, this isn’t it. What it does do is explain very clearly how to invest in individual stocks and how to gather information about them. It details what a brokerage is, how it functions, why you may or may not want an expensive stockbroker, how to gather information about companies and decide whether to invest in them, what dividends are and how they work, and so on.
Continue reading the summary or check out the book below.
→ Read or listen on Scribd.com (2 months free with this link) or use a direct link! (without 2 free months)