Introduction 1
About This Book 1
Foolish Assumptions 1
Icons Used in This Book 2
Beyond the Book 2
Where to Go from Here 3
Book 1: Entering the World of Investing 5
Chapter 1: Exploring Your Investment Choices 7
Getting Started with Investing 8
Building Wealth with Ownership Investments 9
Entering the stock market 10
Owning real estate 10
Running a small business 11
Generating Income from Lending Investments 12
Considering Cash Equivalents 14
Steering Clear of Futures and Options 15
Counting Out Collectibles 16
Chapter 2: Weighing Risks and Returns 19
Evaluating Risks 20
Market-value risk 21
Individual-investment risk 27
Purchasing-power risk (aka inflation risk) 30
Career risk 32
Analysing Returns 32
The components of total return 32
Savings, high-interest, and money market account returns 34
Bond returns 35
Stock returns 36
Real estate returns 39
Small-business returns 40
Considering Your Goals 41
Chapter 3: Getting Your Financial House in Order 43
Establishing an Emergency Reserve 43
Evaluating Your Debts 45
Conquering consumer debt 45
Mitigating your mortgage 46
Establishing Your Financial Goals 48
Tracking your savings rate 48
Determining your investment tastes 49
Funding Your Registered Retirement Savings Plan 51
Understanding RRSPs 51
Gaining tax benefits 52
Understanding deductions and contributions 52
Starting early for maximum profits 53
Taming Your Taxes in Non-Retirement Accounts 54
Figuring your tax bracket 54
Knowing what's taxed and when to worry 56
Choosing the Right Investment Mix 58
Considering your age 59
Making the most of your investment options 59
Easing into risk: Dollar cost averaging 61
Treading Carefully When Investing for University or College 63
Making the most out of a Registered Education Savings Plan 64
Allocating university investments 66
Protecting Your Assets 66
Book 2: Investing in Stocks 69
Chapter 1: Gathering Information 71
Looking to Stock Exchanges for Answers 72
Grasping the Basics of Accounting and Economics 74
Accounting for taste and a whole lot more 74
Understanding how economics affects stocks 76
Staying on Top of Financial News 79
Figuring out what a company's up to 80
Discovering what's new with an industry 80
Knowing what's happening with the economy 80
Seeing what politicians and government bureaucrats are doing 81
Checking for trends in society, culture, and entertainment 81
Reading and Understanding Stock Tables 82
52-week high 83
52-week low 83
Name and symbol 84
Dividend 84
Volume 84
Yield 86
P/E 86
Day last 87
Net change 87
Using News about Dividends 87
Looking at important dates 87
Understanding why certain dates matter 89
Evaluating or Ignoring Investment Tips 89
Chapter 2: Going for Brokers 91
Defining the Broker's Role 91
Distinguishing between Full-Service and Discount Brokers 93
At your disposal: Full-service brokers 93
Just the basics: Discount brokers 95
Choosing a Broker 97
Discovering Various Types of Brokerage Accounts 98
Cash accounts 98
Margin accounts 99
Option accounts 99
Judging Brokers' Recommendations 100
Understanding basic recommendations 100
Asking a few important questions 101
Robo-advisors and Fintech 103
High tech meets equity investing 103
Terminating bad investment decisions with artificial intelligence 104
Advantages of an inhuman touch 104
Exceeding standards 105
Checking Out Canadian Robo-advisors 106
Not just for millennials 107
Asset allocation: What is the robo-advisor investing your money in? 107
What to watch for 108
Fees 109
Putting it all together 110
Chapter 3: Investing for Long-Term Growth 111
Becoming a Value-Oriented Growth Investor 112
Surveying Handy Growth Stock Tips 113
Look for leaders in megatrends 114
Compare company growth to industry growth 114
Consider a company with a strong niche 115
Check out a company's fundamentals 116
Evaluate a company's management 116
Notice who's buying and/or recommending a company's stock 118
Make sure a company continues to do well 119
Heed investing lessons from history 121
Exploring Small Caps and Speculative Stocks 121
Knowing when to avoid IPOs 122
Making sure a small cap stock is making money 123
Analyzing small cap stocks before investing 123
Chapter 4: Investing for Income 125
Understanding Income Stocks Basics 126
Getting a grip on dividends 126
Recognizing who's well-suited for income 127
Assessing the advantages of income stocks 127
Digging into the disadvantages of income stocks 128
Analysing Income Stocks 130
Pinpointing your needs first 130
Checking out yield 131
Looking at a stock's payout ratio 133
Studying a company's bond rating 134
Diversifying your stocks 135
Exploring Some Typical Income Stocks 135
Utilities 135
Real estate investment trusts (REITs) 136
Royalty trusts 138
Chapter 5: Using Accounting Basics to Choose Winning Stocks 139
Recognizing Value When You See It 140
Understanding different types of value 140
Putting the pieces together 142
Accounting for Value 144
Breaking down the balance sheet 144
Looking at the income statement 148
Tooling around with ratios 153
Book 3: Investing in Mutual Funds 157
Chapter 1: What is a Mutual Fund? 159
Beginning with Mutual Fund Basics 160
The Nitty-Gritty: How a Fund Makes You Money 162
Returns: What's in it for you? 162
Returns as a percentage 164
How funds can make you rich 166
What mutual funds buy 167
Checking Out Types of Funds 167
Discovering Where to Buy Funds 168
Chapter 2: Buying and Selling Mutual Funds 171
A Few Reasons to Buy Funds 171
Offering safety in numbers: Public scrutiny and accountability 172
Putting your eggs in many baskets 175
Getting good returns from professional management 176
Making investing convenient 177
Investing without breaking the bank 177
Watching over your investment 178
Getting out your money if you need it 178
The Perils and Pitfalls of Funds 179
Excessive costs 179
Style drift: When managers get lost in the jungle 179
When bad managers attack 180
Vague explanations of poor performance 180
Prospectuses that don't say enough 181
Too many funds and too few long-term results 182
Load versus No-Load: The Great Divide 182
Load funds: The comfort zone 183
No-load funds: The direct approach 184
Chapter 3: Paperwork and Your Rights 187
Signing Up 188
Filling in your account (or RRSP) application form 188
Getting confirmed 191
Prospectuses: Not Always Your Friend 191
You've been warned 192
More charges to look for 194
Introducing the Management Report of Fund Performance 195
Looking at what goes into an MRFP 195
Checking out an MRFP 197
Surveying Your Account Statement 200
Annual and Semi-Annual Financial Statements (or Annual Reports) 202
Chapter 4: Investing in Canadian Exchange-Traded Funds 205
Comparing Exchange-Traded Funds and Mutual Funds 206
The differences 206
The similarities 207
Choosing an Exchange-Traded Fund 208
Main types of ETFs 208
Bearish ETFs 212
Taking Note of Indexes 213
Chapter 5: Beyond Mutual Funds 217
The Good Old GIC: You Know Where You Sleep 218
Types of GICs 219
Finding the best rates 220
Checking out the benefits of GICs 221
Watching out for inflation 221
Bonds and Strip Bonds 222
Considering bond alternatives 223
Investing directly in bonds 223
Stocks: Thrills, Spills, and Twisted Wreckage 224
Going with index funds 224
Buying individual stocks 226
Taking a wilder ride with stock alternatives 227
Income Trusts: No Longer the Taxpayer's Best Friend 228
Recalling income trust mania 228
Clamping down on income trusts 228
Considering investing in income trusts 229
Managed Products: A Fee Circus 230
Book 4: Investing in Precious Metals 233
Chapter 1: Beginning with the Benefits and Risks of Metals 235
Protecting Your Portfolio Against Inflation 235
Precious metals against the dollar 236
Diversification against all currencies 236
Seeing Benefits for Investors 237
Safe haven 237
Privacy 238
Inflation hedge 238
Dollar hedge 239
Confiscation protection 239
Liquidity 240
Portfolio diversification 240
Checking Out Benefits for Traders and Speculators 241
Supply and demand 241
Huge gains potential 242
Trading versus speculating 243
The benefits of speculating 243
Recognizing the Risks of Precious Metals 244
Distinguishing types of risk 244
Minimizing your risk 248
Risk management tools 251
Weighing risk against return 252
Chapter 2: Going for the Gold 253
Gold: The Ancient Metal of Kings 254
Reviewing Recent Trends in Gold 255
Explaining all the bull 255
Telling the tale of the tape: Gold versus other investments 256
Assuring gold's success 258
Securing a Safe Haven from the Coming Storm 259
Comparing monetary and price inflation 259
Watching the dollar 260
Buying and owning gold 260
Checking Out the Gold Market 261
Gold market data and information 261
Industrial supply and demand 262
Investment demand 263
Central banks 264
Meeting a Few Gold Bugs 265
Digging into Other Gold Investing Resources 266
Chapter 3: Discovering the Secret of Silver 267
Understanding the Hybrid Potentials of Silver 267
Monetary uses for silver 268
Industrial uses for silver 268
Researching Silver 270
Sources of data 270
Sources of informed opinion 271
Owning Silver 271
Physical silver 271
Paper silver 272
Focusing on Silver's Compelling Future 273
Looking at the Legends of Silver 274
Jerome Smith 274
Ted Butler 274
David Morgan 275
Book 5: Day Trading 277
Chapter 1: Waking Up to Day Trading 279
It's All in a Day's Work 280
Speculating, not hedging 281
Understanding zero-sum markets 281
Keeping the discipline: Closing out each night 282
Committing to Trading as a Business 283
Trading part-time: An okay idea if done right 283
Trading as a hobby: A bad idea 284
Working with a Small Number of Assets 285
Managing your positions 286
Focusing your attention 286
A Few Personality Traits of Successful Day Traders 287
Independence 287
Quick-wittedness 288
Decisiveness 289
What Day Trading is Not 289
It's not investing 290
But it's not gambling 290
It's hardly guaranteed 291
But it's not exactly dangerous 292
It's not easy 292
But then again, neither are a lot of other worthwhile activities 293
Putting day trading success in perspective 293
Chapter 2: Making a Day Trade of It 295
Planning Your Trading Business 296
Setting your goals 296
Picking the markets 297
Fixing hours, vacation, and sick leave 298
Getting yourself set up 298
Investing in your business 299
Evaluating and revising your plan 299
Planning Your Trades 302
What do you want to trade? 303
How do you want to trade it? 303
Figuring out when to buy and when to sell 304
Setting profit goals 305
Setting limits on your trades 306
What if the trade goes wrong? 310
Closing Out Your Position 310
Swing trading: Holding for days 311
Position trading: Holding for weeks 311
Investing: Holding for months or years 311
Maxims and Cliches That Guide and Mislead Traders 312
Pigs get fat, hogs get slaughtered 312
In a bear market, the money returns to its rightful owners 313
The trend is your friend 313
Buy the rumour, sell the news 314
Cut your losses and ride your winners 314
You're only as good as your last trade 315
Chapter 3: Signing Up for Asset Classes 317
What Makes a Good Day Trading Asset? 317
Liquidity 318
Volatility, standard deviation, and variance 319
Capital requirements 320
Marginability 320
Securities and How They Trade 321
Stocks 322
Bonds 328
Exchange traded funds (ETFs) 331
Cash and Currency 332
How currency trades 332
Where currency trades 333
How the Canadian dollar is traded 333
Commodities and How They Trade 333
Derivatives and How They Trade 334
Types of derivatives 334
Buying and selling derivatives 336
Chapter 4: Investing, Trading, and Gambling 339
Understanding Risk and Return 340
What is risk, anyway? 340
Getting rewarded for the risk you take 343
The magic of market efficiency 344
Defining Investing 346
Talking about Trading 346
Getting a Grip on Gambling 347
Managing the Risks of Day Trading 348
Chapter 5: Understanding Regulations 349
How Regulations Created Day Trading 350
Who Regulates What? 351
Brokerage Basics for Firm and Customer 354
Are you suitable for day trading? 354
Staying out of the money laundromat 355
Rules for day traders 356
Tax reporting 357
Hot Tips and Insider Trading 357
Taking on Partners 358
Book 6: Cryptocurrency Investing 359
Chapter 1: What is a Cryptocurrency? 361
Beginning with the Basics of Cryptocurrencies 362
The definition of money 362
Some cryptocurrency history 363
Key crypto benefits 363
Common crypto and blockchain myths 364
Risks 365
Gearing Up to Make Transactions 366
Wallets 366
Exchanges 366
Communities 367
Making a Plan Before You Jump In 368
Select your cryptos 368
Analyze, invest, and profit 369
Chapter 2: Why Invest in Cryptocurrencies? 371
Diversifying from Traditional Investments 372
Stocks 372
Bonds 374
Forex 375
Precious metals 377
Gaining Capital Appreciation 378
Historical returns 379
Huge growth potential 380
Increasing Income Potential 381
A bit about traditional dividends 382
The basics on crypto dividends 382
Fueling Ideological Empowerment 383
The economy of the future 383
Freedom from government control of currency 384
Help for the unbanked and underbanked 385
Chapter 3: Recognizing the Risks of Cryptocurrencies 387
Reviewing Cryptocurrency Returns 388
Capital gains (or losses) 388
Income 388
Risk: Flipping the Other Side of the Coin 389
Glimpsing Cryptocurrencies' Reward versus Risk 390
Digging into Different Kinds of Risk 391
Crypto hype risk 391
Security risk 392
Volatility risk 394
Liquidity risk 394
Vanishing risk 395
Regulation risk 396
Tax risk 397
Exploring Risk Management Methods 397
Build your emergency fund first 399
Be patient 399
Diversify outside and inside your cryptocurrency portfolio 401
Chapter 4: How Cryptocurrencies Work 403
Explaining Basic Terms in the Cryptocurrency Process 403
Cryptography 405
Nodes 406
Mining 406
Proof-of-work 407
Proof-of-stake 407
Proof-of-importance 408
Transactions: Putting it all together 408
Cruising through Other Important Crypto Concepts 409
Adaptive scaling 409
Decentralization 409
Harvesting 409
Open source 410
Public ledger 410
Smart contracts 410
Stick a Fork in It: Digging into Cryptocurrency Forks 411
What is a fork, and why do forks happen? 411
Hard forks and soft forks 412
Free money on forks 413
Book 7: Investing in Real Estate 415
Chapter 1: Thinking about Real Estate 417
Investigating Real Estate Investing 418
Discovering the opportunities 418
Considering alternatives 421
Figuring Out Whether You're Right for Real Estate Investing 423
Determining how much you can invest 424
Assessing your risk tolerance 424
Getting into Real Estate Investing 426
Knowing your needs 426
Keeping your goals in mind 427
Understanding your limitations 427
Looking for locations 428
Fitting Real Estate into a Financial Plan 430
Considering when to sell 430
Planning for retirement 431
Wills and (real) estate planning 431
Chapter 2: Exploring Real Estate Investments 433
Homing In on Residential Properties 434
Investing begins at home 434
Renting a suite, paying a mortgage 435
Renovating for fun and profit 438
Owning second homes and cottages 439
Securing Commercial and Industrial Properties 440
Assessing classes 441
Assessing liquidity 443
Weighing Condos as an Investment 445
Investing in residential condos 446
Investing in commercial condos 447
Investing in hotel condos 447
Dreaming of Recreational Properties 448
Cottages and cabins 449
Fractional ownership 449
Resorts by the suite 450
Developing a Taste for Raw Land 450
Staking your claim 451
Goin' country or swingin' in the city 451
Banking on land 452
Deciding to build 452
Howdy, Partners: Buying into Syndicates 453
Gaining strength in numbers 455
Turning to the crowd 455
Knowing the risks 455
Researching Real Estate Investment Trusts 456
Trusted alternatives 456
Reading financial statements 457
Chapter 3: Establishing Your Investment Strategy 459
Studying Market Cycles 459
The real estate cycle 460
Factors affecting market conditions 462
Knowing the Market, Knowing Yourself 465
Taking stock of your skills 466
Gauging the market's future - and yours 468
Selecting an Investment Type 469
Investing with intent 470
Lapping up liquidity 470
Staying strong in soft times 471
Doing your research 471
Selecting Advisers 472
Before you begin: The criteria 473
The real estate agent 475
The lawyer 476
The appraiser 477
The accountant 477
The financial planner 478
Other professional advice 479
Chapter 4: Pulling Together the Cash: Assessing Your Resources 481
Assessing Your Financial Situation 482
Identifying Resources 483
Liquid: Savings 484
Illiquid: Long-term investments 485
Vaporous: Friends and acquaintances 487
Banking on family 488
Working with Professional Financial Partners 492
Squaring accounts 493
Recognizing danger 494
Optimizing Saving Strategies and Leverage 494
Assembling a war chest 495
Weighing the opportunities and risks of leveraging 497
Chapter 5: Scouting Properties: Where to Look and What to Look For 499
Assessing Current Market Cycles 500
Research: Doing your homework 500
Analysis without paralysis: Tallying the variables 505
The decision: Trust your gut 506
X Marks the Spot: Identifying a Target Market 506
Separating the fads from the fundamentals 507
Getting to know markets and neighbourhoods 508
Honing your vision 510
Consulting the locals 512
Selecting a Property 512
Home sweet home 513
Location, location, location 516
Amenities and services 517
Looking to the future 518
Identifying the Types of Land Ownership 519
Holding freely 519
Holding with limits 520
Knowing That a Property's Right for You 521
Checking Out Even More Resources for Property Information 522
Government agencies 522
Real estate brokerages and boards 523
Financial institutions 524
Real estate consultants 525
Owners' associations 525
Builders' associations 526
Provincial land registries 527
Property assessment offices 527
City hall 528
Court records 528
Index 529
