Bestsellers on retirement or investment planning: fiction or non-fiction?

A few years back, I attended an executive course run by University of Nebraska, Omaha. It took place just prior to the annual general meeting of Berkshire Hathaway, also in Omaha Nebraska. The focus of the course was to explore a range of fundamental valuation techniques and hear from key executives within Berkshire Hathaway. 

Now for those who might not have heard of Warren Buffett, he is among the richest people in the world and Berkshire Hathaway is his company. He is also regarded as one of the greatest investors of all time.

During this event, I was privileged to hear Susie Buffett speak. Susie is Warren’s daughter and it was incredibly interesting to hear her personal perspective of growing up with her father.

In Susie’s presentation she commented on Buffettology (Simon & Schuster UK 2012), a book written by Mary Buffett – Warren’s former daughter-in-law – and David Clarke, a successful portfolio analyst, about Warren’s investing theories. Susie expressed some frustration about the book, suggesting it is fiction rather than non-fiction in genre.

From time to time in the many years I have been a financial planner, books on investing or retirement planning sometimes hit the bestseller lists. Not that often, though, as these topics are typically rather dry. Like any fad, we see a bunch of people try to follow the recommended steps and methods in these books, which profess to provide all the elusive answers to investing and retirement.

In reality, when people try to implement these plans, they often fall short of the promised outcomes described in the book. Then, financial planning professionals like me are left to pick up the pieces.

I think the problem is that people often forget there is a distinct difference between a financial journalist and a practising financial planner. 

This can be an easy oversight. If someone in the media writes about a certain topic, it follows that they must be an expert. Right? But what they are actually an expert in? A financial journalist is trying to keep and grow his readership by providing interesting, insightful and entertaining content in the areas of finance and investing. This is vastly different to the skill set required to provide personal financial advice on a day-to-day basis. 

While there are a number of publications by financial journalists that are wonderful for providing critical analysis and are incredibly insightful and thought-provoking, these writers have the maturity to understand what their skills are and, like any profession, they also know their limitations. A few, however, try to do both.

So why do many bestselling books on investing or retirement planning miss the mark? I feel the main reason is they are trying to make the content entertaining and, in some cases, oversimplify or too broadly generalise a concept to the point that it gives the reader some idea but, in most cases, not the full details.

Just think about a book you love that was made into a movie. It is just never as good, is it? The main reason for this is usually that the story needs to be condensed, while the level of visual entertainment needs to be heightened.

To be clear, I am not against people educating themselves on retirement and investment planning; however, like any topic if you are wanting to increase your knowledge the books you should be reading are generally not on the bestseller list; rather, they are academic-type textbooks that might be thought provoking, but typically not an easy read and rather heavy going. 

A handy benchmark is that if you can read more than one chapter at a time without having to consider the information before you move on, you are probably reading the wrong book.

Like all great ideas, aside from bestselling books on investing or retirement planning, it’s important to always seek professional guidance from a practising financial planner and, of course, I recommend AJ Financial Planning.