Phil Town Day at Free Money Finance: Phil Town's 10-10 Rule

Welcome to Free Money Finance. Today's a very special day and I'm glad you could join me. Why's it so special? Because it marks the release (correction: in eight days -- it releases March 21) of Phil Town's new book: Rule #1, The Simple Strategy for Successful Investing in Only 15 Minutes a Week! As such, I've declared today "Phil Town Day at Free Money Finance" and all day I'll be featuring posts about Phil and his new book.

Now you might find this strange given that I only gave Phil's book a measly four stars. However, there are several reasons to dedicate this day to Phil:

• As I said in the review, I like him personally.
• He has some interesting concepts, most of which are sound investing strategies.
• My biggest beef is with his claims (which I'll cover in a minute) which deal with the level of success and time it takes. However, you still can use his principles to deliver a good return if you're willing to put in the time.
• We all could learn something.
• It's controversial! Some people love him, some hate him. It makes for GREAT comments! ;-)

So let's start with the heart of the matter: Phil's claims.

I didn't give Phil Town's Rule #1 book the greatest review, but it's not because I think he's some sort of whacko. No, in fact, Phil has several bits of advice I like (and use) and generally, I like his contrarian style. Furthermore, his suggestions for picking stocks make sense intellectually and take some of investing's best-practices (in my opinion) and combine them together. There's a lot of good in the book.

So why did I rate it so poorly? Because I don't believe his claims. Particularly, the following claim:

Make 15% a year with no risk in only 15 minutes a week.

I don't buy it.

Now if he said, "Make 12% a year with no more risk than average (or even a bit less risk) in 3-5 hours a week," I'd believe that (and probably would have rated the book higher). However, which phrase do you think will sell more books. Yep, Phil's a great marketing guy (or has one on staff).

One rule I do like from Phil is what he calls the 10-10 rule. It goes as follows:

I won't own this business for ten minutes unless I'm willing to own it for ten years.

Basically, it means don't buy something unless you think it will be making money for a long, long time. Obviously, there's no way to predict that with 100% certainty, but Phil does give some thoughts on this. That's why I rated it a 4 -- it's worth you checking out from your library and reading/listening to for some of the nuggets in it like the 10-10 rule. Then you can decide for yourself if it's worth buying.

This series sponsored by Gannon on Investing, the value investing blog and podcast.

Comments

[chandra]

Hi FMF,
I believe Phil's book actually comes out March 21. Eight days to go...

[Kyle]

Phil's book is Pick Of The Day at Kyle's Book Club

[Mallory]

HI;

I have just finished reading Phil's book. I actually am having trouble registering on his site. The link does not get sent to my email address. Has anyone else had this problem.

[Rick]

Same here. No email sent from site.