Rule #1 by Phil Town Book Review

Rule # 1: The Simple Strategy for Successful Investing in Only 15 Minutes a Week!  by Phil Town was a book that I was interested in reading solely because I had a friend who told me he went to a paid seminar where he saw Phil Town speak.

I think he paid a few hundred dollars because he wanted to learn how to invest.  He mentioned that Phil Town talks a lot about Warren Buffett and Phil Town emulates his investing strategy on Warren Buffett’s investing strategy.  Since I am a huge fan of Warren Buffett, of course, I was intrigued and so added this book to my 2018 Personal Finance Goals to read.

who is Phil Town?

Phil Town is a baby boomer who is an investor and a motivational speaker (he speaks to 500,000 people annually about investing).  He served in the US Army and became a river rafter guide after the war.  He was scraping by and met someone named “The Wolf” (he chose not to reveal who this is) who taught him how to invest and turned his $1000 to $1.45 million (in only 5 years apparently). The way he was taught to invest is based on the teachings of Benjamin Graham and also by Warren Buffett.

My First Impression of Rule #1

When the title of an investing book says you can learn to invest in 15 minutes a WEEK I am usually skeptical.  15 minutes a day, maybe, but 15 minutes a week?  The book also says that you can earn 15% returns annually.

The Rule #1 is based on Warren Buffett’s rule, which is “Don’t Lose Money”.  When I pick up the book Phil Town seems to have a very ‘salesman’ type of style of writing, which was not very pleasant to read.  Like he is showing off how well he did with his investing.  He does write clearly and casually, almost like he was talking to you in person.  He translates things into easy to read and understand concepts and depicts some easy to understand analogies.  There is a chapter in the book where he evaluates the businesses, almost like The Intelligent Investor by Benjamin Graham style, but in a much more easy to understand format.

I can see why the book became a “New York Times Bestseller” because anyone would want to read an investing book where they can make 15% annually and NEVER lose money.  But of course, in reality, we know that these endpoints are very difficult to achieve (unless you are Warren Buffett of course).  He doesn’t recommend any particular stocks but gives you the ‘how-to’ on picking the right stocks.

Has Mr. Buffett Read this Book?

He ‘name drops’ Warren Buffett so much almost like he’s using his name in vain.  He has Warren Buffett quotes scattered throughout the book but perhaps almost twists them around, I don’t know if Warren Buffett meant his sayings the way Phil Town endorses them.  He talks about not losing money when you buy a company that is worth $1 for $0.50.   It makes me wonder if Mr. Buffett has read Rule #1 and if so, I wonder what he thinks of it.

Contradicting Information

Phil Town explains Four M’s: Meaning, Moat, Management, and Margin of Safety very well and explains how you can calculate your intrinsic value or sticker price to determine the value of the business that you are intending to purchase a portion of.  I found a free website called Stock2Own that helps you calculate the sticker price by just inputting the ticker symbol.  His calculations involve Earnings Per Share (EPS), the analyst’s growth estimate, historical P/E and his 15% expected annual return.  I tried inputting the values for a few stocks that I own already and it was interesting to see the results.

He talks about holding the business and investing it for a long time, and then he talks about technical analysis.  These technical analyses tips include buying and selling positions quickly based on a MACD, relative stochastics, and stock price compared to the 10-day moving average.  It feels a bit contradictory when you talk about value investing and then also talk about technical analysis and getting out before there are big losses coming up ahead.  To me, I don’t think keeping track of technical analysis data will take 15 minutes a week!

My verdict

Let’s talk the good points of the book first.  I do like that he explained how businesses work and why it is important to invest in them (and how they can be more profitable and less labor intensive than investing in real estate).  He explained the business’ meaning, moat, management, and margin of safety very well.  He also gives some great examples of companies and goes through the analysis of each.  The book has very good reviews on Amazon but I’m not sure if these are fake accounts as the reviews are very brief!

As mentioned above, I did not like the salesman, aggressive style of the book.  He makes investing sound too simplistic and easy.  I didn’t like how he talked about buying a stock and holding it for the next 10 years but then he talks about ‘going in and out of the company with the big guys’ and dumping the stock when it reaches your sticker price or when the technical analyses indicate trouble.  A quarter of the book seemed like he was teaching the reader how to do a Google search or how to use the Internet.  I’m not sure what his demographic is intended to be- maybe non-Internet savvy baby boomers?

Rule #1 was an easy read but I wouldn’t recommend it.  If I were a beginner investor I think I would get carried away with his calculations and perhaps log onto his website where I would buy his calculators to get access to them.  Instead, if I had a friend who was a beginner investor, I would recommend that they stick to an index fund or stick to a robo advisor.  Instead of reading the book, you can read the free summary from Nugget of Rule #1 here.  If you’re still interested in getting the book despite the negative review, you can click on the picture of the book above.  I really just wanted a picture of the book, hence the affiliate link to Amazon.

I wouldn’t say this one of the best dividend investing books out there, but it is decent if you’re interested in dividend investing.

Genymoney.ca is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.

Readers, have you read Rule #1?  What did you think of it?

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18 thoughts on “Rule #1 by Phil Town Book Review”

  1. It’s not my idea of investing, it also doesn’t appear to be what he’s talking about, but you could:
    -buy 1 bond and 1 equity index fund
    -set up automatic withdrawals from your checking account
    -re balance once a year
    and forget about it for the rest of your life.

    It would probably average out to less that 15 minutes per week and one would be “investing”. Tom

    Reply
    • @Tom- Today Warren Buffett at the Berkshire AGM said if you bought a $10,000 investment in the S&P500 in 1938 it would be worth $51 million! And that’s only 15 minutes in 1938 without any time spent per week investing! Brilliant. Yeah, there was a lot of snake oil in this Phil Town book, there’s no way that 15 min a week can allow you to invest big with individual companies with Warren Buffett’s return. He reads 9+ hours a day!

      Reply
  2. GYM, I never heard about Phil Town. Sounds like he is a typical sales guy. I have not invested in individual stocks for years, and just selected the low cost index fund. In this way, I simply follow the market. It’s low maintenance, and fits me pretty well.

    Reply
    • @Helen- And you’re a prime example of it working out fantastic because you are financially free and retired! 🙂

      Reply
  3. Thanks for reading this so I don’t have to. 🙂
    It all sounds a bit fishy to me. I wonder how much of this book is made up. It’s probably a fictional mentor like Rich Dad.

    Reply
    • @Joe- Haha, no problem! Whenever people state with such confidence that something MUST work and only takes 15 MINUTES a week, it always makes me skeptical. Yeah, I don’t know if it is made up but it certainly sounds very far fetching. I feel bad for my friend who paid $350 for a ticket (or something to that tune) to see him talk but he’s never invested (doesn’t know how) and only knows how to invest in real estate, so for him, he felt like it was a good ‘investment’ to hear Phil Town speak.

      Reply
  4. I haven’t heard of this guy before but based on your review it sounds like he’s trying to use catch phrases to make casual readers read his book. “Successful Investing in Only 15 Minutes a Week” already sounds like a marketing pitch. Sounds a bit dicey!

    Reply
    • @Kris- Hah yes it was! I swapped between ‘this guy sounds credible’, ‘oh what an inspiration’, to ‘blllleeeeh I want to chuck this book across the room’ multiple times throughout the book.

      Reply
  5. “The book also says that you can earn 15% returns annually” —> You lost me right there. Buffet is able to achieve it …. but not all his buys are a success story … GE comes to mind. I believe he sold it at a loss. But, he has enough $ to take that kind of a hit. But, the ones he succeeds with more than make up for his losses. And he definitely has a lot of successes. For a new investor with lets say 1,000$ that kind of risk is impossible.

    “Turned his $1000 to $1.45 million (in only 5 years apparently)” —> through value investing?

    Reply
    • @dividendgeek- I know!! He has so much capital he can sit patiently and take a hit and then find a great stock and hit a gold mind (like his investment in Amex).

      Reply
  6. Hey GYM! I have not read this book, nor heard of this dude…. thank you for reading it and recapping it in your great summary!

    Have a great weekend!

    Reply
    • @Mrs DS- Heh you’re welcome! I thought everyone has heard of him because he seems to sell out at his ‘investment talks’.

      Reply
  7. Hi GYM, thanks for the review, I’m always happy to hear of any investing books I haven’t read before – although based on your review I won’t be putting this anywhere near my reading list…

    I get a little upset thinking about the novices that read books like this and think it’s all too easy, then get carried away taking big unnecessary risks thinking they can replicate Buffett and inevitably end up losing money (as well as wasting it listening to seminars from salesman like this…)

    Reply
    • @Frankie- YES. As RB40 says it reminded me of Rich Dad Poor Dad but people seem to love the author of Rich Dad Poor Dad. I guess many are attracted to the allure of MAKING MONEY QUICK instead of the slow and time tested approach of index investing.

      Reply
  8. Hi GYM!

    Thanks for putting this together! I have to say I’m a bit skeptical with his approach. Technical analysis and timing the market is not easy, and I would say impossible to learn by dedicating just 15 minutes a week. Same with investing. While 15 minutes a week are better than nothing for a beginner, and hopefully enough to get the person hooked into spending more time learning, I do not think the knowledge you get from this is enough to let you do something more than just buy any stock and leave it alone for the next 10-25 years. So, I guess I’ll pass on the book but I will read the nugget summary though.

    Oh! And thanks for the Stock2own link! I did not know about them, but I went there and liked it a lot!

    See you around!

    Reply
    • @Lily- Thanks Lily! Yeah, it was an interesting link I inputted some numbers in it myself to test his calculations haha.

      Reply
  9. Thanks for covering, GYM.

    I’ve read it before and found a couple of the points you’ve also captured to be useful for consideration. Like most articles or books on investing – or any other subject for that matter – there will be something useful you pull from the read. Overall, not my favorite because I didn’t in enjoy it, but rather I think there are some other worthwhile reads on similar topics. – Mike

    Reply
    • @Mike- Thanks for visiting! Do you have any recommendations for other more worthwhile reads? (agree this one wasn’t very worthwhile)

      Reply

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