Blessed by the Potato

One of the challenges I think people have with investing is that the actual purchasing part is quite unlike other aspects of our daily lives. We use metaphors like “fruits and baskets”, describing different accounts (RRSP, TFSA, etc.) as baskets where you place investments (cash, stocks, bonds, funds thereof) — but you can’t go down to your local general store and ask the shopkeep for a half dozen index funds off the back shelf to stick in your basket.

Even after you decide that you want to keep things simple and use a straightforward indexing approach, and you have to figured out what to buy to fit that plan, you have to figure out how to buy those investment products. The big barrier can come when you have to go and “buy an XIC.” There’s no counter you can walk up to and make that happen.

The investment industry is either full-service (with associated fees) or a completely do-it-yourself “wholesale/auction” experience. The high fees attached to many products are built in assuming that you will pay for planning, stock-picking, and other help even if you never get it and you’re only after someone to help you make the transaction. Many people are disappointed with the depth and quality of the advice they receive in a bank branch, and are surprised to find that the staff are in fact in a sales role. Whether satisfied with the advice or not (and in many cases one needs more background knowledge to know that they should be dissatisfied), I think many Canadians are shocked at the fees when put in context.

I think some Canadians do go into the bank not looking for advice, but for a shopkeep. So they’re not dissatisfied with advice because they never really expected any — they were just looking for help making a transaction. But again, the fees for that level of service are shocking.

I would have thought that with TD’s e-series there was enough of a MER there to let the branch staff help with placing orders — even if they were not allowed to spend time on e-series clients — but instead the e-series are completely off-limits to branch staff. There is no minimal-cost “purchase assistance” type service. The closest equivalent is Tangerine, which packages everything together for you so you just need to throw money at the account — it’s the closest implementation I’ve seen to how many people talk about “buying an RRSP.”

And that’s just mutual funds: with ETFs there are added levels of confusion for people expecting the shopkeep model. It is not at all like going in and picking up a cool book that your friend recommended from the shelf — it’s more like buying livestock at auction crossed with a old-time bazaar where everyone is selling everything to everyone else and the prices change by the second.

It would be interesting if someone could take a one-time commission (not an ongoing trailer fee forever and ever amen) to make that a more pleasant retail experience. Put up a list of prices that stay where you put them, and the shopkeep eats the fluctuations; or to make buying ETFs more like buying mutual funds where the division from the money you have to throw at the asset class happens automatically, and where no one gets burned by limit orders or the lack thereof. Getting back to reality, there’s no getting around having to learn this somewhat different (but once you get it, not difficult) way of purchasing investments.

Of course, to help people navigate on their own when there is no clerk to guide them is why I wrote The Value of Simple, and that implementation part forms the meaty middle of the book. Maybe one day more banks and fund companies will drop the pretense of offering high-cost advice and stock picking to every customer, and instead offer transaction assistance for low-cost index funds. Until that day comes, sign up below to receive updates on the book.

By now you all know that I’ve been working on an investing book. I’m pleased to announce that the title is The Value of Simple: A Practical Guide to Taking the Complexity Out of Investing.

I’m aiming for a December 1 release and I’m really excited about it. I’ve put a lot of work into refining the book and testing it out with readers (novices and experts) to make sure it works. I even like love the title.

Briefly, The Value of Simple: A Practical Guide to Taking the Complexity Out of Investing is a plain-language guide to implementing an index investing strategy for Canadians. With a focus on developing good processes to minimize the room for human error and step-by-step instructions, the book walks investors through the elements of managing their finances for the long term: how they can determine an appropriate asset allocation, devise a savings plan, stick to it through automation, track their investments, and deal with the inevitable issue of taxation. It provides tools and templates, along with default suggestions and rules-of-thumb to help prevent analysis paralysis and get investors started as soon as possible. Moreover, it directs the reader to focus on what can be controlled, to minimize effort and complexity.

For the average investor, a low-cost index investing approach is the easiest and simplest method available, and also provides the highest chances of long-term success. While there is a lot of material available on why investors should choose passive approaches over high-fee active mutual funds and what passive investing products exist, the average investor is at a loss on how to implement a passive index investing plan.

Investing doesn’t have to be complex to be successful. Indeed, simple solutions are valuable and are more likely to succeed in the long term. This book will guide you through implementing those simple solutions.

There is a separate webpage for the book (click here!) where you can find more details and pre-order it (and soon, purchase it). You can also sign up for email updates below (and I promise to only send a few):

The book is very nearly done. The text is all in there and has had multiple runs of editing. Now it’s down to formatting all the little things, remastering a few images for print, getting the cataloging-in-publication data, the cover art, etc.

I’m proud of it — I think it will truly help people get started at investing, and covers a lot of important elements that are not covered by the books that are currently out there. While I usually have a lot of problems with self-promotion, I can think of the book as being separate from me, as a thing I can promote and herald without it being self-promotion in my damaged mind. But I’m still not particularly talented at it.

I can do the Fermi estimation and figure that there are millions of Canadians out there between 24 and 60 who could really benefit from this book. Yes, many won’t need it; others won’t invest on their own no matter how helpful the book; some are in debt and in no position to use it. Even if just 5-10% of them need it and would use it though, that’s a big market.

And I have no idea how to reach it. The simple fact is that I am not good at marketing. I can maybe write decent copy if I focus on not letting the loquacity run away from me and give it a few revisions. But that depends on having people actually there reading something, and I don’t know how to get to those people in the first place.

My big hope is that everyone who reads it will love it as much as my beta readers did. That they will recommend it to their friends, family, and frenemies. Sadly, people don’t talk about personal finance and investing. Even if I put a copy into someone’s hands and they adored it, to the extent of writing me a little email about how it totally opened their eyes to investing fees and changed their life, the odds are that they will not tell anyone else about it*. For whatever reason, vampire bondage erotica is a more acceptable dinner table, coffee with friends, or book club topic than personal finance. So I can’t rely on word-of-mouth to spread the news of how awesome and helpful the book is.

But beyond word-of-mouth, what have I got? I tried contacting some people in the media. I’ve had online interactions with Rob Carrick, Ellen Roseman, and Melissa Leong in the past when I wasn’t trying to sell them anything (not necessarily deep ones — moreso with Ellen and Rob than Melissa), so I started by contacting them. They were polite, but it wasn’t very promising. There are other people I can try to contact, but those would be completely cold calls. Somewhere I saw a suggestion to get some freelance articles in the paper or a magazine to build name recognition before a book release, which sounds like suggesting that to successfully sell your book, you start with having a past bestseller first — the book started because Adam Mayers didn’t want my how-to articles for the Star! So the media’s a bust.

Advertising? I got a free credit for Google AdWords a few years ago and I tried advertising for the predecessor book. The ads were a complete waste. Maybe subway posters would have a better ROI, but I suspect not.

Last time around I was really bad with social networking: the timing really worked against me, releasing right into my PhD defense, and then having Blueberry. This time I will try to distribute sample chapters and deeper discussions as guest posts on other blogs (if they’ll have me). Of course the problem there is that I might be hitting the wrong audience: it’s the people who aren’t reading personal finance/investing blogs who need the book the most. Good reviews on Amazon help, and I will plead with people to fill those out (their honest opinions — I’m not down for astroturfing). But if readers who liked it are already not telling their friends, going to the effort of writing a review may be out of the question.

So I have to admit it: I am not good at marketing. I have no idea what else to do. Suggestions, blogosphere?

Help me Obi-Wan Kenobi, you’re my only hope.

* — True story, nearly no hyperbole (at least, not in the retelling).

I had originally scheduled a minor reveal post today where I was going to tell you all the amazing title of my amazing new book and provide an amazing (-ly short, for me) synopsis, to start building something I’m told is called “buzz.” Big with bees, I hear. Anyway, in talking with some people about that the point was raised that maybe I should keep totally silent until the book is actually available for pre-order (rather than the pre-pre-order state it’s in now where you email me and I add a mark to my tally to guess how big to make the initial print run). I think I will explode if I wait that long, so I’ll probably just end up publishing that reveal post tomorrow anyway.

I got the first drafts of the cover concepts back from my artist today and I’m quite impressed. There was a concept that some people liked because it really said “this book is about doing stuff with money.” But it was the first one I threw out because it was so generic. The one I immediately decided was the one is a bit different, which I hope means that it will stand out on the shelf and make people pick it up. Hopefully only another week or so then until I can swap out the teaser image on the right with the actual cover (unless I listen to reason and wait until pre-orders open).

I still haven’t set a firm date to take PSGtDIYI out of publication yet. Expect that it will happen suddenly on the same day that (firm) pre-orders open for the new book.

I’ve had to enter pricing information to get my ISBN* and UPC code, which means I had to decide on pricing without having a proper public hand-wringing about it. I can still change it, but I think I’ve settled on going a little bit cheaper than most of the books out there (which have a list price of $19.95 but actually sell in the mid-high teens). I went with what looks like an odd price, so that with HST (5% on books) it will come out to an even dollar amount if you’re paying cash. I don’t really know how much something like that might phase people (or please them). I also don’t know whether being a few dollars under the $19.95 cluster is attractive or gives off a “stinky kind of cheap” aura.

* I have an ISBN assigned. Several, actually! Squee!

The cover to Potato’s Short Guide to DIY Investing is something I designed myself one weekend. It’s fairly uninspired in terms of layout: block lettering on the top for the title, a fairly plain image, and then my name. It’s black-on-white so a bit more dull than the typical book, but I think the art piece of my physical $10 bill origami bunnies (with hand-drawn eyes and whiskers — no photoshop there) overlaid on the graph that forms the central message of the book was, well, pretty good. I mean, the book even heavily featured bunnies so it works well.

Still, it does look kinda amateurish in hindsight. So I’ve retained an artist friend to help me create a wonderful new cover design for [new book: title to be announced soon]. I’m trying to come up with some ideas of where to start.

Many personal finance books fall into a few basic categories for cover designs. You have your author lounging in a suit ones, like Preet Banerjee’s, Dave Chilton’s, Peter Lynch’s, Jim Cramer’s, and a whole host of others. Then there’s the really, really ridiculously long title so that the whole book cover is just text school of thought, like Rob Carrick’s and Gordon Pape’s. Some are more academic: plain, with some text decoration at most, like the Intelligent Investor (some editions, anyway) and the Little Book of… series, but not as crowded as the other textual school of thought. Then there is the Cult of the CGI Piggy Bank, which covers nearly every other personal finance book out there. I think Millionaire Teacher had one of the more unique covers, but I can’t say whether that actually helped it sell copies.

So in preliminary discussions on how the cover should be designed this time I’ve decided that I’m not going with the lounging-in-a-suit type cover: no one knows me, and I’m not that pretty. The pig is out, that is just a complete non-starter for me.

Rather than plain white the base of the cover will include some colour. I don’t know if I will go with a conventional title on top, framed image in the middle, author on the bottom, or something else — we’ll play with it. A refresh of the bunnies is possible (not necessarily origami money), but now the bunnies occupy much less of the book*.

A maple leaf is in. Everyone agrees on that, and many can’t believe I didn’t work one in to the first book’s cover. A clear oversight on my part for a book focused on Canadians — though at least my bunny origami was made from a recognizably Canadian $10 bill. How else are they to know? (Other than reading the synopsis, that is.)

Beyond bunnies I’m having trouble of thinking of anything unique and creative related to this book. How do you say, in a visually appealing way, that this book will walk you through investing in a friendly and helpful way? How do you say that this will help you cut out the noise and focus on what matters? Is there a visual metaphor for “index fund good” or “here there be ETFs”? Or should I bring in tropes from other genres, like a long-haired man with oiled musculature ripping asunder the bodice of a flushing maiden arching her back with an impossible curve? Spaceships flying through asteroids and nebulae (mentioned nowhere in the book)? A full moon with mist on the moor?

Actually, let’s revisit that assumption: is unique and creative something to shoot for at all? There are hundreds of personal finance books out there, but maybe if I get too creative with the cover it won’t look like a PF book (or like a respectable one)? Have these few tropes evolved for a reason?

Any brainstorming thoughts or suggestions to add?

Note: if I get a publisher they will likely take care of the cover art. But I’m proceeding as though it will be self-published before the end of 2014 until I have a contract in my hands to the contrary.

* – All the existing bunnies made it over to the new book, but there are no additional bunnies despite the near-tripling in length, so proportionately fewer bunnies.