Personal financial planning involves numerous investing-related decisions. Doctors, and other highly educated professionals, must make these decisions in their retirement plans, in their children’s 529 college savings plans, in the context of a home purchase, and when considering buying into a private business, to name a few.

As we will see in this book, the investing process is mechanically simple, but the investing environment is chaotic and baffling: We encounter unfamiliar terminology, as well as untrustworthy advisors and arrogant people. We struggle with cryptic mathematical symbols and get confused by fast-talking heads on TV who often contradict each other and rarely seem to say anything concrete.

Many of us shy away from such chaos, resulting in procrastination: In an uncertain and confusing world, we put off investing decisions. As established in the first book of the Pillars of Wealth series, in the world of finance procrastination is the enemy. Some of us respond by seeking a reliable advisor who can take this burden off our hands. The problem, of course, is that some advisors are inept, some are conflicted, and some are downright dishonest. Blindly outsourcing to others introduces significant risks.

This book aims to equip you with the ability to make better investing decisions. It demystifies financial markets and outlines a scientifically grounded blueprint for creating and monitoring the investment portfolio consisting of all your wealth. The same technique can be applied within your individual investment accounts. For example, within your employer-provided retirement accounts (401(k), 403(b), 457(b)), your individual retirement accounts (IRAs), your child’s 529 College Savings Plan or in your regular brokerage or trading account. But most importantly, as already noted above, it applies in aggregate across all your accounts, encompassing your entire nest egg.

This book is not about giving stock tips; it’s about providing knowledge and insight, resulting in empowerment. We can apply the age-old fishing analogy here. Giving you a stock tip is like handing you a fish. In contrast, educating you about the world of investments is like teaching you how to fish—along with a diagram explaining how to build your first fishing rod. In the event you still wish to outsource some decisions to an advisor, this book helps to frame your conversation with that advisor, with a view to ensuring that investing decisions made on your behalf are fully consistent with your family’s objectives.

This is the third book in the Pillars of Wealth series for medical professionals. Book I introduces the pillar metaphor, in which pillars of wealth are the various repositories of value in which we build household wealth. The first book provides a comprehensive view of personal financial planning, covering budgeting, debt management, saving, investing, retirement planning, insurance, contract discussions for young doctors, and estate planning. Book II explores the private practice pillar. It's a business primer tailored for medical professionals.

Who is this book for?

This book is primarily intended for doctors or other highly educated professionals who:

• seek a greater understanding of, and control over, their investing activities
• feel lost, intimidated, confused or overwhelmed by financial markets and the mere thought of having to make investing decisions
• are suspicious of financial advisors, brokers and economic forecasters

This book is intended to:

• provide objective information about the way financial markets work
• provide a template for assembling a passive investment portfolio
• discuss various market players and their motives
• outline the various risks you face as an investor
• emphasize what is scientifically known and unknown about effective investing techniques
• highlight the temptations and decision-making errors that conspire to make you your own worst enemy
• help you decide whether to work with an advisor or “do-it-yourself”

For a broader perspective on personal financial decision making, please visit the first book in the Pillars of Wealth series.