Still Water
My method: every month, I invest what I've saved at regular intervals in passive, broad-market index ETFs, hold for the long run and don't sell at the highs; when markets crash, I add more from new income.
It is what remained after I tested and revised my approach against historical data from the US, Japan and Taiwan; the results differ by country (see Chapter V).
The Whole Book at a Glance
Hover to see links · click a node for details · click the map, then scroll to zoom · drag to movePreface
Understanding Capital and the World
Financial literacyCapital and laborThe retirement gapWealth concentrationKiyosakiGlobal wealth concentrationWill retirement be covered?Understanding Wealth
Passive incomeAssets and liabilitiesCash flowPay yourself firstSix stages of financial freedomPassing it onStocks and Investing
Fees and costsMean reversionMargin of safetyActive vs. passiveSingle-stock riskThe cost of tradingGrahamBogleLynchMungerMalkielBuffett's ten-year betThe Great Way Is Simple
CompoundingBubblesMarket cyclesFirst principlesSimplicityInflationKostolanyThree famous bubblesTaiwan's big crashesNT$2,000 a monthThe Compounding Method
Long-term holdingBroad-market index ETFsMr. MarketValue vs. priceBuying in crashesCircle of competenceAvoiding scamsBonds and cashBuffettShillerSiegelDCA time machineThe longer you hold, the better your oddsSell when pricey vs. holdBuying in crashesFees compound tooReal returns by assetInvesting Is a Loser's Game
Dollar-cost averagingGlobal diversificationFear and greedThe timing trap"Sell when pricey" backtestDefensive investingBorrowing and leverageMarket thermometerMarksEllisKim Seung-hoMarket temperatureGood Luck
LuckPatience and disciplineAppendix
FisherThe Whole Method in One Sentence
Save every month, invest at regular intervals in passive, broad-market index ETFs, hold for the long run and never sell at the highs — and when markets crash, add more from new income.
Japan −11 to −15%Doubling contributions from new income in months when stocks were down 20% or more: about 20% more per dollar in the US and about 10% more in Taiwan, but 11–15% less in Japan.Author's backtests · Chapter V
Pick a Path and Start Reading
You don't have to read cover to cover. Pick a path that fits the time you have; the places you've read light up on the map.
The Author's Method, Fast
The one-sentence method plus the four charts that matter most. You'll know exactly what I do.
For Busy Family Members
The preface, the heart of Chapter V and the thermometer checklist from Chapter VI.
From Ideas to Method
Nine chapters, from understanding money and capital to a method I have tested, and revised, against historical data.
The DCA Time Machine
Pick a year and a market, and see what would have happened if you had started investing every month back then. All real historical data — no assumed returns.
See the Numbers by Year (Table)
Market Temperature
Each thermometer shows where today's reading ranks in its own history. It describes a position in history, not a buy or sell signal.
Bull or Bear? All the Thermometers Together
All of the above are actual past figures. They do not predict the future and are not investment advice or a buy or sell signal.
9 Chapters, from Ideas to Method
A Letter to My Family
A letter to my family: why I wrote this book and how to read it.
Understanding Capital and the World
Most people are controlled by money. First, see how capitalism works — and whether you'll run short when you're old.
Understanding Wealth
Assets and liabilities, cash flow, saving before spending, and the six stages of financial freedom.
Stocks and Investing
Owning a stock means owning part of a business. Investing, speculating and gambling — and the mistakes ordinary investors make most.
The Great Way Is Simple
Back to first principles: the four ingredients of compounding, market cycles, and why bubbles keep coming back.
The Compounding Method
The heart of the book: invest regularly in the whole market, hold for the long run, never sell at the highs, and add from new income in crashes.
Investing Is a Loser's Game
First, don't lose: defensive investing, and a market thermometer worth a glance each week.
Good Luck
Success has a share of luck. Own the whole market and you share in everyone's good fortune.
Detours, Scams and a Mini Glossary
Detours I took: stock picking and timing long US bonds — plus a guide to avoiding scams, and a glossary.
The Investors in This Book
This book stands on their shoulders. Their quarterly public holdings filings are on our sister site, On the Shoulders of Value Giants (for research, not as recommendations).
Benjamin Graham
Father of value investing: Mr. Market and the margin of safety.
See Connections on the Map →Warren Buffett
The voice of compounding and long-term holding; his ten-year bet saw an index fund beat hedge funds.
Public holdings filings (research, not a recommendation) →John Bogle
Father of the index fund: buy the whole haystack, and the lower the cost the better.
See Connections on the Map →André Kostolany
The egg theory and the man walking his dog: reading human nature and market cycles.
See Connections on the Map →Howard Marks
The pendulum of emotion, and defensive investing.
Public holdings filings (research, not a recommendation) →Peter Lynch
The cocktail-party theory; a bear market is like a winter blizzard — it passes.
See Connections on the Map →Philip Fisher
Father of growth investing: if you did your homework, the time to sell is almost never.
See Connections on the Map →Charlie Munger
Buffett's longtime partner; the book draws on his views on compounding, patience and lifelong learning.
See Connections on the Map →