Book Review: How Much Is Enough?

With my retirement about four years away (famous last words) "How Much Is Enough?" seemed like a suitable personal finance book to add to my reading list. The question is of fundamental importance to all prospective retirees. One of the two authors (Arun Abey) is well known in the Australian financial planning industry as a co-founder of IPAC Securities (now part of AXA). The other co-author has previously written and published other books on investing.

One of the fundamental problems with this book is that it attempts to cover a lot of topics in a short book. Almost none of the topics get the level of detail necessary and, in most cases, come accross as shallow and incomplete summaries.

On the whole I found the book to be disappointing.

A number of important topics were covered, including personal well being and not losing sight of the importance happiness as a goal, educating children on money, giving back, the importance of thinking longer term and avoiding being either overly conservative or overly aggressive with investments. However, the coverage of most of these topics was generally shallow - most readers would need more depth in order to derive full benefit from the points raised.

A selection of the issues I had with the materials presented:

1. the emphasis on shares: I was left with the impression that a portfolio invested entirely in shares was the only suitable form of investment. Given that the book was written with a predominantly Australian audience in mind, even this coverage was deficient in that the tax advantages (franking credits, capital gains taxes) were not mentioned. On the positive side, short term trading was properly condemned;

2.there was no mention of a balanced portfolio and no mention of the use of low cost index funds - the importance of keeping costs low;

3. diversification was explained in terms of holding a diversified portfolio of shares, not a diversified portfolio of assets;

4. real estate: a number of reasons why real estate was a bad investment were set out. While I would agree that shares are probably a better investment vehicle for most people and I liked the debunking of some real estate myths, the coverage was biased because none of the benefits of investing in real estate were included;

5. the roles of life insurance, medical insurance etc were not covered in any detail;

6. a whole chapter devoted to the need to have a personal finance adviser and how to select one. I had issues with the message that even people who know what they are doing should pay for a financial adviser;

7. most critically of all: the authors did not answer the question posed in the book's title!

On the whole, I did not find this book worthwhile reading. The good points did not come close to compensating for the deficiencies.

Not recommended.