Money for Life: The 20 Factor Plan for Accumulating Wealth While You're Young

An investment adviser and author of The Unemotional Investor, Sheard believes that most people erroneously look toward retirement as a financial goal. Instead, he says, everyone should strive for financial independence, the point at which one has accumulated enough money that one no longer has to work. Obviously, this amount will vary by age, lifestyle and other considerations, but Sheard offers a foolproof formula that works for everyone: ""Financial independence = annual income requirement x 20."" To determine the annual income requirement, readers must determine what they currently spend on housing, income taxes, healthcare, transportation, etc., as well as any potential sources of future income (such as pensions). Sheard's strategy is straightforward and easy to understand. Yet, while financial independence is certainly a goal that people should work toward, many readers will need more help applying this formula to their own finances. The second half of the book offers advice on working with financial advisors, using index funds and selecting brokers, but some of this advice may confuse inexperienced investors. And Sheard touts the benefits of buying stocks on margin; a tactic that is too risky for most people. For readers already well versed in handling their investments, this book offers a fresh approach to long-term financial planning; beginners should look elsewhere. (Sept.)