Monday, June 23, 2008

Andy Tobias

Miami Beach author Andrew Tobias, to me at least, is a pioneer. His writing on finance and investing was (and is) clear, human and humorous. Before Andy, it was ponderous, soporific and scolding.

I had the pleasure of interviewing him several years ago, just a few months after 9/11, when many of us, including Andy, thought G.W. Bush was doing a good job "fighting terrorism." Now we know better.

My interview with Andy and a review of the latest edition of his book — which I continue to recommend — follows.


Published 1/12/02 in The Miami Herald

Andrew Tobias is on top of the world in his tastefully appointed Miami Beach high-rise apartment, which offers a mesmerizing view of the bay and Intracoastal. It is one of several residences he shares with his partner, a fashion designer, whom he refers to as his "meal ticket.''

A successful author and investor for the last three decades, Tobias has just revised his perennial best seller,
The Only Investment Guide You'll Ever Need. Mixing solid, conservative financial advice with warm wit and practical understanding and insight, Tobias has also written several autobiographical works. His 1997 book, My Vast Fortune, is a wry and often bittersweet memoir recounting his diverse investment experiences, including tales of attempts to develop residential properties in the changing areas adjacent to downtown Miami.

Tobias is as entertaining a raconteur as he is an author. He's also a surprisingly moral and customer-value-centered individual, especially considering the sea of sharks he swims in along with others who profess to offer financial wisdom.

Q: When you were a kid, what did you want to be when you grew up?

A: I had no clue. I was competitive and ambitious, but had no specific career aspirations. When I was at Harvard, I kind of stumbled into a job at the university's Student Agencies for $2 a hour. I wound up managing a bunch of little enterprises. One of them, "Let's Go,'' a mimeographed handout, evolved into a series of paperback travel guides that are still in print. I had an enormous amount of fun. During my senior year, I was offered a job - with stock options — at National Student Marketing Corp. But that's another story.

Q: How did you become a writer?

A: Well, that's the other story. My experiences at National Student Marketing were pretty wild. The stock went from $6 to $140, then crashed; the president ultimately went to jail. So I went back to business school, age 22, but in the meantime I wrote an article about it. I sent it to 13 different magazines. I had no idea you weren't supposed to send to more than one at a time. And after receiving a dozen rejection letters, I sort of forgot about it. I hadn't kept a list, so I forgot that there was one that still hadn't said no. And then out of the blue I got a call from an editor at New York magazine who asked if the piece was still available. They put me on the cover and offered me a job.

Q: Skipping ahead many years, you're now a very popular author, having published the wildly successful and irregularly updated
The Only Investment Guide You'll Ever Need. Yet unlike other gurus, there are no Andrew Tobias tapes, infomercials, seminars or commercial websites. What's the problem, Andy?

A: Lazy. Well, actually, I don't think expensive tapes and seminars and all that are a good value. It's not like exercise tapes, where you need to see the actual exercise, and maybe get inspired by the trainer. Investment advice works best in printed form, so it can be read, considered, digested and referred to.

As for websites, I wrote a daily column several years back for the company that is now AmeriTrade. They paid me well and let me write about anything I wanted to. When my contract was up, we parted very amicably.

The website I have now ( is a real self-indulgence. Nobody pays me, so I don't have to worry about offending advertisers — or Republicans. I can say any dumb thing I want. And my friend Marc Fest set it up for me so it's a one-man operation. I can put up a column in the middle of the night.

My reward, besides being able to spout off, is the feedback from the readers. Some of it's nasty, but most of it is great, and much of it is a lot more interesting than what I wrote in the first place, so I quote it for my next column.

Q: In
The Only Investment Guide You'll Ever Need, you suggest sitting down and putting a budget together — or at least a list of one's regular expenses and income. But everyone hates doing budgets, so what else can a person do to get started?

A: Hey, I show you how to make it fun! But if you're not buying that, a good start would be to cut up your credit cards, or lock them away someplace really inconvenient to get to, and get a debit card instead. Paying 18 or 20 percent interest on a credit card is tragic. With a debit card, you're only spending money you already have. Sign up for payroll savings deductions at work, a credit union, savings bonds — whatever forced savings you can do. Ten percent is a good figure to start with; more if you can. And if your company offers a 401(k) plan, sign up for that, too - especially if your employer matches part of your contribution. It's free money!

Q: What do you think of the Administration's economic stimulus initiatives?

A: President Bush is doing a very good job in the war against terrorism. You have to give him very high marks for that. But at home, it's a very different story.

At home, he and the Republican leadership looked around and decided that the most important priority we have to tackle is the plight of rich people in America. It would be nice to help seniors with prescription drugs, but a huge tax cut for the top 1 percent is more important. It would be nice to protect the Social Security surplus we were building up, or to renovate crumbling schools or help to lower class sizes for kids just starting out in life, but cutting the estate tax rate from 55 percent to zero percent for the estates of billionaires is more important.

And — hello? — we have an energy crisis and yet we cut the budget alternate energy research — in half? Shouldn't we be tripling it? The only people who could like this are the oil companies, who don't want us using alternatives.

Q: Do you give stock tips?

A: Not when I can help it.



The Only Investment Guide You'll Ever Need. Andrew Tobias. Harcourt/Harvest; 272 pages.

People who buy stocks when they get bonuses and sell them when the roof starts to leak are entrusting their investment decisions to their roofs,'' says prolific author and investor Andrew Tobias in the latest and possibly greatest edition of his humbly titled book.

First published in 1978 and revised periodically, the guide is a welcome resource for people who shun anything relating to personal finance while simultaneously whining about their own powerlessness — and cluelessness.

Tobias is a witty writer whose healthy skepticism, common sense and diverse experience made him (at a very early age) one of the country's most popular and highly regarded personal business authors. His ability to cut through the inherent confusion and purposeful obfuscation accompanying personal finance issues makes Tobias a very valuable asset, indeed.

The new, updated edition provided very timely advice about the current state of the stock market and trading on (and in) the Internet, as well as the latest changes to the laws on saving for rainy days — if not monsoon seasons.

For example, here's what he says (in part) about retirement plans:

"As you doubtless know, the money you've been paying in Social Security taxes, lo these many years, has not been set aside for your retirement. Most if it has been paid out to people already in retirement (e.g., your parents or grandparents). It's gone. . .

The ratio of workers to retirees is falling. In the early years of Social Security, way back when, there were 40 people working for each person collecting Social Security benefits. Now it's 3. By the time today's 45-year-olds retire, it will be more like 2.

What this means is that if we want to retire in comfort, we will have to provide, in large measure, for ourselves. Fortunately, there are a variety of tax-deferred retirement plans to help.

"The best retirement plans are the 401(k) and 403(b) 'salary-reduction plans' that tens of millions of employees contribute to. What makes them so good is that many employers add 25 cents or 50 cents or even more to each dollar you choose to save this way. This is free money. If your employer offers a deal like this and you're not taking full advantage of it, you're an idiot. Even if your employer doesn't augment your own contribution, you should fund your 401(k) to the limit, because:

  • It is a relatively painless way to save.
  • You avoid taxes on the money you contribute until, many years later, you withdraw it.
  • In the meantime, no tax is due as it grows."

Similarly, Tobias demystifies a number of other topics, including stocks, mutual funds, insurance, real estate, tax strategies, online investing and more, with a minimum of technical nomenclature, condescension, smoke and mirrors.

Experts and professionals seeking more technical or highfalutin texts may prefer to look elsewhere, but for the rest of us, this may not only be the sole and complete repository of all required investment information, but also simply the best.

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