Just Keep Buying (Book Review)

OUR RATING
3.8/5

Just Keep Buying by Nick Maggiulli is one of the newest personal finance guides on the market.

What makes the book stand out? Our readers won’t be surprised to learn that most of Nick’s conclusions can be found in other books we’ve reviewed. In fact, parts of the book have been published on Nick’s own Of Dollars and Data blog.

But with this new compendium, Nick adds some fresh perspectives.

Most importantly, he organizes the essential knowledge into actionable steps and does it in a pleasant way. 

Today, Kathrin will have a closer look at the core concepts of Just Keep Buying and discuss who should buy this book. Raph will add his observations, too.

KEY TAKEAWAYS

  • The first section of the book is dedicated to saving. It is much more important at the start of your wealth-building journey because your investment returns only make a small difference to your total returns.
  • The 2x rule provides an easy way to get rid of spending guilt. Every time you want to splurge on something, you should aim to invest or donate an equal amount.
  • Nick is not a fan of early retirement, as he believes that most people are happier and healthier when working.
  • The second section of the book is focused on investing the money you’ve saved. Nick covers various types of investments, but emphasizes that the stock and bond markets are the easiest and most consistent investments.
  • We rarely give a book maximum score for both Investing Concepts and Personal Finance Know-how, but the combination of lifestyle themes and investing here is impactful.
  • While European investing is not covered, there is also a small section that is only targeted at a US audience, but the majority of the book is applicable to investors all over the world.
Here is the full analysis

SNAPSHOT

Just Keep Buying - The Concept

The author is the Chief Operating Officer at Ritholtz Wealth Management. Firms like Ritholtz typically advise high-net-worth individuals on how to invest their portfolios and plan their finances. Even if you haven’t heard of Ritholtz, you may have come across one of their blogs. Through them, they provide insights into the US Investing landscape and contribute to making this, often difficult to penetrate industry, more transparent.

As the title suggests, the most important point the author makes is that you should keep buying no matter what. That’s a message you may be familiar with. Nick adds new data to back it up.

He emphasizes that saving what you can and purchasing income-producing assets as soon as possible is the best way to build wealth.

“Just Keep Buying” is an easy-to-remember rule of thumb you can use during bull markets, bear markets, and everything in between. No matter what’s going on in the world, the stock market is likely to go up over the long term.

Therefore, buying as many assets as you can at an early age is the most consistent way towards success. 

Nick contributed to the space e.g. by showing that Buying the Dip is not the panacea. 

Dollar-Cost Averaging is still more efficient.

Buying The Dip Vs. Dollar-Cost Averaging (Example Of Analysis)

Source: ofdollarsanddata.com

The Style

The main factor that determines whether I finish a book is the style it is written in.

I found Just Keep Buying easy to read and engaging throughout.

The layout is very clear, with two main sections called “Saving” and “Investing”.

Each of these sections is split up into numerous chapters that explain the core concepts.

In addition to the text, Nick uses many graphs and images to explain his ideas, which makes them much more digestible.

If you’re a complete beginner, you might find the investment section a bit complex because it involves a significant amount of math. 

However, Nick advises people in the initial stages of their wealth-building journey to focus on optimizing their savings rather than investments, so the first section will be more relevant for you.

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WHAT YOU WILL LEARN

PART 1 - Personal Finance

The first section of the book is dedicated to saving. 

The author states that this is much more important at the start of your wealth-building journey because your investment returns only make a small difference to your total returns. Therefore, increasing your savings is key.

Nick emphasizes that earning more is a better way of accumulating wealth than increasing your savings rate. He uses statistics to underline how people naturally save more when they have a bigger income.

Other topics covered in the “Savings” section are whether you should rent or buy a home, whether debt is ever good or not, and how to figure out when you can retire.

Unique Rules of Thumb

After reading and reviewing ten financial books and several movies, you’d think I’d know everything there is to know about personal finance.

But each work is unique, and Just Keep Buying touched on some concepts I’d never thought about before.

For example, I particularly liked Maggiulli’s 2x rule, which provides an easy way to get rid of spending guilt. Every time you want to splurge on something, you should aim to invest or donate an equal amount.

If you’re willing to pay 2x for the item, it’s worth it. If not, you shouldn’t buy it. This is simple to remember and effective.

WHAT DID Kat THINK?

While I agree that saving more is a good strategy, I think that optimizing spending is just as important because it has a double benefit.

Not only do you build wealth faster when you save more, but you also lower the amount of money, by working on your spending habits, you will need to retire. For me, this information is missing in the book.

The author mentions that he is not a fan of early retirement, as he believes that most people are happier and healthier when working.

I know both people who are very happy at work and those who love their early retirement. Everybody is different, and while many people like Nick really enjoy their work and are happier with a job, others find fulfilment in alternative ways.

While I didn’t agree with the portrayal of FIRE in the book, I liked how Nick emphasized the other aspects of retirement, such as mental health.

They are at least as important as money, and they rarely get mentioned in personal finance books.

WHAT DID Raph THINK?

The book provides a much more balanced way of thinking about personal finance, saving and retirement than most Financial Independence books. 

Thus, it will appeal to a wider audience.

I particularly enjoyed Nick’s personal take on the most important asset we have – time, and spending money on things we like, while saving in other areas. 

I find it much closer to my current lifestyle, as our readers will know.

We begin our lives as, full of expectations, Growth Stocks and end our lives as value stocks, when reality finally exceeds them.

PART 2 - Investing

The second section of the book is focused on investing the money you’ve saved. Nick starts by going over various types of investments.

He mentions options like farming and starting your own business, but he emphasizes that the stock and bond markets are the easiest and most consistent investments for the majority of people. 

In subsequent chapters, the author explains why you shouldn’t pick individual stocks, how market timing doesn’t work, and why you should always invest as soon as you can instead of drip-feeding a lump sum into the market. 

The author also dedicates one chapter to selling assets once you’re in the drawdown phase. 

He states that you should buy ASAP but sell slowly over time to maximize your returns.

This is not mentioned in any of the other works because most of them focus on the accumulation phase. 

WHAT DID Kat THINK?

Nick makes interesting observations about where to invest. 

While most other personal finance experts advise people to max out their retirement accounts, he takes a more balanced approach. 

By locking away your money, you might miss out on opportunities.

What’s more, the high fees of some retirement plans negate the tax benefits.

WHAT DID Raph THINK?

Nick approaches Investing very pragmatically and backs it up with data.

I find the combination of lifestyle themes (e.g. Nick’s lifestyle creep examples that can be quite interesting for most readers in their 30s) and investing very impactful.

Key asset classes are succinctly covered from a US angle, providing a great introduction.

Volatility as the price of admission into passive investing and the risk of inaction are also well-illustrated. 

What I would have liked to see, in an otherwise exceptionally well-written book, is a clear distinction between volatility and risks that we can’t measure. 

For instance, I would argue with 7 in 8 odds that an equity market will grow its purchasing power in the future based on historical data. Those tail risks are unpredictable, as readers familiar with Taleb know.  But in the end, our take-aways and practical implications for readers, are the same.

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Confused about asset allocation? Rethinking your portfolio strategy? Wondering how much you can safely withdraw for a seamless transition to part-time work or retirement?

Personalised guidance can often be the key to overcoming your investment dilemmas. At the request of our readers, we’ve launched a tailored coaching service designed to address your unique financial needs. Our readers have found such profound value in our sessions that they’ve confidently moved on from their traditional – often very expensive – Financial Advisors. 

SHOULD YOU BUY THIS BOOK?

How we rated the book

Our overall rating comprises five key considerations, including suitability for beginners and European and UK readers.

OUR OVERALL RATING
3.8/5
1. Beginner-Friendly
4/5
2. Investing Concepts
5/5
3. Investing How-to (Europe)
2/5
4. Financial Freedom Principles
2.5/5
5. Personal Finance Know-how
5/5
OUR OVERALL RATING
3.8/5
1. Beginner-Friendly
4/5
2. Investing Concepts
5/5
3.Investing How-to (Europe)
2/5
4. Financial Freedom Principles
3.5/5
5. Personal Finance Know-how
5/5
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Rating Justification

We enjoyed the intuitive structure and easy-to-understand language used in this book.

It is a good choice for those who have already recognized the importance of saving and investing or those who have a lump sum they would like to invest. 

As our readers will know we rarely give a book maximum score for both Investing Concepts and Personal Finance Know-how. 

While the book provides a wealth of information for investors, it is not designed as a manual to help you get to Financial Independence. Unlike other works, like The Simple Path to Wealth, Nick doesn’t emphasize increasing your savings rate and aggressively pursuing financial independence early on.

While European investing is not covered, there is also a small section that is only targeted at a US audience, but the majority of the book is applicable to investors all over the world.

Just Keep Buying is suitable for people who would like to deepen their personal finance knowledge. It is not meant for complete beginners but rather for those early on in their journey who would like a comprehensive guide.

It could also be a good choice for those who have used an investment advisor in the past and would now like to manage their portfolio on their own.

Thank you for reading.
Good Luck and Keep’em* Rolling!

(* Wheels & Dividends)

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