Rule #1 Investors
This month (January 2010), we’ll be discussing Phil Town’s “Rule #1: the simple strategy for successful investing in only 15 minutes a week.”

The author breaks ground by discussing the “myths” of investing, such as “you have to be an expert to manage money.” Then he helps shatter these myths by explaining that Rule #1 investors should live by four straightforward steps:

1. Find a wonderful business.
2. Know what it’s worth as a business
3. Buy it at 50 percent off
4. Repeat until very rich

The point of Town’s book is to teach us how to find a wonderful business that we can “buy” for half of what it’s worth. Sound simple? Well, the way he spells it out, yes, it’s simpler that any regular Jane might think, but it does start to get a little tricky when he introduces formulas to determine what he refers to as “The Big Five” numbers – ROIC (return on investment capital); Sales Growth; EPS (earnings per share); Equity; and Cash. He assures us that with a little practice we can become a whiz at doing the math either with pencil and paper or by using the nifty calculators on his website, ruleoneinvestor.com, or at other online resources.

This book is packed with valuable information which I’m excited to discuss with my Women & Finance book club members. Hope to see you at our meeting next week – 6:30 p.m., Tuesday, Jan. 19, at Florence Branch Library.