Book Review: Stop Working too: You Still Can!

I was surprised recently when the Canadian Capitalist posted a “first impressions” review of Derek Foster’s new book, “Stop Working too:  You Still Can!”  I was surprised because I’ve reviewed two of Derek’s previous books (Lazy Investor and Money for Nothing – which includes an interview) and have mentioned him favourably a number of times on the blog.  In spite of this, I wasn’t on his e-mail announcement or press release for the new book (and, worse, wasn’t offered a free review copy).  If you’re reading this Derek:  You hurt me.  You hurt me real bad.

Never one to let a simple obstacle like not getting a free copy force me to pay for a book, I camped out for a few hours at Chapters and read the new book there.  The table of contents isn’t posted on-line anywhere, and I don’t have a copy to refer to, but in spite of this I think I can give a decent overview.

The Canadian Capitalist hit the nail on the head with each of his first impressions from flipping through the book.  This book is focused on the fundamentals of personal finance, and does a good job conveying some of the basic principles.  Derek comes out entirely against debt, which I don’t agree with, but he’s in good company (Squawkfox and Dave Ramsey).  He presents some basic ideas for paying off your mortgage more quickly (such as negotiating for a better rate, switching to bi-weekly payments, adding small extra payments whenever possible, etc).  He comes out in favour of TFSA and gives an overview of this (fairly) recent new vehicle for retirement.

I was shocked when banks started trying to sell principal-protected notes, PPNs (and at a very expensive price).  Derek spends a chapter explaining how to roll your own, which has been covered elsewhere a number of times, but is useful for anyone who feels drawn to this investment vehicle.  He presents three possible 10-year scenarios (the entire stock market goes bankrupt, the stock market stays the same value and it goes up) and illustrates how an investor 100% in equities would fare compared to someone investing in PPN.  I somewhat felt that he should have gone to greater lengths to convey that the first two scenarios are VERY, VERY improbably.  As he lays it out, someone who isn’t reading carefully might infer that the three scenarios are equally likely and make a very poor investing decisions (get married to the “benefit” of PPNs).

Towards the end Derek presents an “advanced idea” of using an RRSP to move income to the next year when your going to drop to a lower income bracket (such as when you retire).  I talked to Mike about doing the exact same thing when I went back I went back to school (so it was kinda cool to read about an investment strategy I’d come up with on my own before), however I didn’t feel this was worth inclusion in what was already a pretty short book (this would be useful to a small number of people VERY infrequently during their life).

Derek defended selling his portfolio and continuing to promote his earlier “buy and hold forever” books.  I’ve never been as offended by this as other bloggers / readers were, but I didn’t think his justification would sway many of his critics.  As the Canadian Capitalist mentions, he also acknowledges the risk of option trading, which is a good thing (although he still recommends it as a strategy a little more broadly than perhaps he should).

I think Derek may have rushed this book to the printers a bit, as there were a number of glaring typos (send me an early review copy next time Derek and I’ll even proof read it for you!).

Overall, I think this is an interesting, introductory personal finance book targeting Canadians.  In many ways this book does a better job than any of his previous books for providing a broad perspective on Derek’s view of Canadian personal finance and his recommendations for everyday (would be) investors.

“Stop Working Too: You Still Can” can be purchased from Derek Foster’s website (http://stopworking.ca) or from most major book chains.