Respected Globe and Mail personal finance columnist Rob Carrick has followed up How to Pay Less and Save More For Yourself: The Essential Consumer Guide to Canadian Banking and Investing (read my review), a guide to getting the best deals in banking and investing, with another book with an equally long title. But don’t let the long title deter you. This is a rather short book (roughly over 200 pages), written in a breezy style and in a format that is perfect for random reading because the book is filled with handy lists such as “Six crummy mutual funds that make the industry look bad”, “Five great deals in fundland”, “Five key considerations in choosing a discount broker” and “Ten traits of a great adviser”.
I found it refreshing that Rob Carrick pulls no punches and tells it like it is. Take the “Three Examples of Fund Industry Shenanigans”, in which Rob lists the mutual fund industry practices that really bug him. Here’s what he says about making a big deal about management fees:
You may now have grasped the idea that management fees are nothing but a component of the total cost of owning mutual funds. In quoting management fees in its marketing material, then, a mutual fund company is giving you only a partial view of what it costs to own its products. Why do fund companies do this? My cynical view is that it’s to fool people.
After all, the term management fee can easily be mistaken for management expense ratio. Publicize management fees all by themselves, and maybe some people will be fooled into thinking your funds are cheaper to own than they actually are.
This is not merely a book about fund industry shenanigans, though the industry does come in for heavy criticism (and deservedly so). There is a lot of ideas for investors of all stripes, from beginners to the pros, from picking an adviser to avoiding principal-protected notes. The toughest part in investing is avoiding big mistakes. Rob Carrick’s Guide will help in avoiding some pretty big ones that could set back your finances by years. Too bad if the fund industry’s feelings are hurt in the process. After all, you can’t make an omelette without breaking eggs.
Rob Carrick’s Guide is published by Doubleday Canada and has a cover price of $19.99 and is available on Amazon for about $15. Thanks to Rob for mentioning this blog as one of the “Five blogs that will make you a smarter investor”.
