Introduction
Just Keep Buying is a book about money and wealth, backed by data and numerous charts. First published in the UK in 2022. Here in this article we will share an honest review of the book. Nick Maggiulli the author of the book, is COO and Data Scientist at Ritholtz Wealth Management, uses data and analytics to guide smart personal finance and investing decisions.
Key points of the book
- This 277-page book has 21 chapters. While many books on wealth – like The Psychology of Money, Rich Dad Poor Dad, Think and Grow Rich – cover familiar ground, Just Keep Buying stands out with its unique take. Here are some key points.
- Save vs Invest – Since income and expenses fluctuate, your saving rate shouldn’t be fixed. Focus on growing income and save aggressively. If expected savings exceed investment returns, prioritize saving; if not, prioritize investing. If both are similar, do both.
- The 2x Rule – If spending on yourself feels indulgent, match it by investing in income-generating assets or donating. It’s a simple path to guilt-free spending.
- FIRE Rat Race – This book questions how much money we really need for retirement and when to retire. Amid the FIRE trend, it challenges early retirement dreams by highlighting the harsh realities that may follow. “Before you decide what to retire from, make sure you know what you want to retire to“
- Human Capital & Financial Capital – You won’t be able to work forever, so replace your human capital with financial capital before its too late. Investing is the best way to accomplish this.
- Buy Quickly, Sell Slowly – Markets tend to grow over time, so buy early and sell slowly to let your wealth build. Avoid timing the market—this approach also reduces short-term tax costs. “Even God couldn’t beat dollar-cost averaging“.
- Expected Return – This explains a data-driven formula to estimate returns after market crashes—like the 2020 COVID rebound. Here’s the formula and expected return data: “Expected Annual Return = (1.5)^(1/No. of years to recover) -1”
Using this formula if you think market will recover in
– 1 year, then your expected annual return = 50%
– 2 years, then your expected annual return = 22%
– 3 years, then your expected annual return = 14%
– 4 years, then your expected annual return = 11%
– 5 years, then your expected annual return = 8%
- Fund the Life – Sometimes it is okay to sell your investment. After all, what’s the point of building your wealth if you don’t do anything with it?
- Feeling Rich – No matter how much wealth you gain, someone will always have more. Win the money game, but don’t lose yourself doing it. If your net worth is more than $4210, then you are wealthier than half of the world. If your net worth exceeds $93170 then you fall in the top 10% globally (as per the 2018 Credit Suisse Global Wealth Report).
- Most Important Asset – Time is your most most important asset. You can always earn more money, however nothing can buy you more time. Invest in yourself first. Time is the most important asset for anyone.
Conclusion
Just Keep Buying is one of the finest book on wealth and money – a must-read for all. Written post-COVID, it’s packed with data-driven insights, lessons, and valuable advice for everyone. You could purchase this book on amazon.
Disclaimer: I express my own views in this article after reading the book, without intending to offend anyone. I do not sponsor or endorse anyone, and any resemblance to actual persons, living or dead, is purely coincidental. The mentioned link is an affiliate link, and purchasing the book through it is a great way to support me if you’d like to read along!
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