The Four Pillars of Investment Book Review

Overview: 

The aim or premise for this finance book is pretty much the blurb it gives on the blue banner on the front of the book. It aims to arm you with the knowledge and to then build the right portfolio for you. It offers the history and technical aspects of finance so you can make decisions from your own analysis and understanding. It gives some suggestions on how to invest and ultimately with the aim of achieving financial independence if you follow it correctly.

​

First Impressions:

I was initially blown away. I spent probably the first 1/3 of the book having to Google some of the terms they were using. I would then have to remind myself later on the in the book when that term came up again and it's relevance in this new topic. I found that the language used was too technical for my level of financial understanding at the start and it knocked my confidence if I am honest. But I persevered and I am glad I did. I am sure most people didn't have this shock at the start, but if like me you do, just keep going. You will learn lots and ultimately come out the other end in a better position. 

​

Key features:

The layout of the book using the four pillars for structure is really helpful, and it was the first and second pillar which I struggled with the most to get my head around. 

​

Pillar One: Investment Theory - here he lays out how return and risk are linked, the foundation for investing. 

Pillar Two: Investment History - A look back at all the events in financial history. Even though this was the hardest in my view to get my head around it held some of the most valuable information. 

Pillar Three: Investment Psychology - He highlights here how we as humans, and us individually, are holding us back. Linking this to Pillar Two is really helpful to make sure you don't fall into any traps. 

Pillar Four: Investment Business - This is all about the people who are trying to take your money, and how perhaps they may not have your best interest at heart. 

​

What I learnt:

​

1/ The history for me was probably the most interesting aspect of this book, including the detail he went into and the explanation to why certain events took place. He goes through the mistakes that led to these events so you can get a deeper understanding. If in an event there was no mistakes made and it was more just a random life event, he explains how peoples reaction then influenced the next step in the process. 

Not to act as a spoiler alert but looking back at history ultimately helps us in the future when it repeats itself - or acts very similar. 

​

2/ The first pillar of the book lay down a gauntlet of information about finance. It was probably pitched a little too high for me but I was coming in super low, which meant I learnt an absolute bomb of information. I felt after that pillar I was well equipped for any future finance book as I had such a good understanding. 

​

3/ The final pillar on the effectiveness on hedge funds, brokers etc on your returns really rocked the boat here - in a good way. If I hadn't had listened to a few podcasts or read a few books I would have definitely had gone down the route of paying someone to help me. I would have most certainly got taken into the claims of their high returns and happily had paid inflated fees for that service. The book explains in clear terms the limitation these services have, and because it is at the end of the book and you have all this knowledge, you feel confident going it alone. Very clever. 

​

Conclusion: 

This gets a 4/5 from me and I would recommend to people looking at improving their financial and investing understanding. It gives a really good level of detail with some thorough examples. It links in the human emotion, which is very important, and gives a layout of how to use that knowledge. I like how there is that higher level of detail than some of the more mainstream books - although if you asked me that during the first 1/3 I may not have agreed with you. I really felt that this gave me an understanding that when I read other books which were "simpler", I didn't get confused or distracted by them and could focus on their individual message. Which is why I recommend it to people, it gives you such a good level of understanding. The only thing which limits me giving it 5/5 is the level of base understanding you need before you read it. Now if I read this book 5th in-line with a more basic understanding perhaps I would have scored it 5, and my level of financial intelligence should not limit it's quality - which it doesn't. I just felt that even now, it would feel more like a text book than a casual book. I am also aware the hypocrisy that the positive feedback I gave it at the opening of this conclusion is the thing that's holding it back. This book is great and you should read it, but be prepared to really think and concentrate on it. It's not a holiday pool book. ​​