Book Review: ‘Anyone Can be Rich’ by Mark Tobak, MD

You can tell a lot about a book from its epigraph quotes. Dr. Mark Tobak’s book, Anyone Can Be Rich: A Psychiatrist Provides the Mental Tools to Build Your Wealth, includes a quote by the great singer Sophie Tucker: “I’ve been rich and I’ve been poor. Rich is better.” Tucker was a self-made, larger than life entertainer whose rags to riches pragmatism suits the book’s democratic message well. Tobak is a psychiatrist, not an investment advisor, and his approach to helping people get rich is that it’s all in our heads. We just have to get more Sophie Tucker about our money. In case that seems like a far fetched notion, here’s a neat fact: super-investor Warren Buffett endorsed the book.

 

Tobak has counseled many a patient on better handling money problems, and this book was prompted by his observation that nearly all of his patients worry about money. Some can’t pay their bills. Some can’t save. Some find themselves in the kind of financial hot water that’s all too familiar these days: loads of debt, high-interest credit card, savings account like a stagnant pool. Wouldn’t it be terrific, Tobak mused, if there were a simple book that could teach people how to get rich? So he wrote it.

 

Anyone Can Be Rich offers a lively combination of common sense, the author’s considerable financial savvy, the winning tactics of investors such as Buffett, and a variety show of pop culture references — such as Marilyn Monroe and the classic movie, It’s a Wonderful Life. There are plenty of clear explanations that turn math into an Ah-hah moment. And delightfully, Tobak finds a way to turn everything into a lesson on investing: just as actors age out, so do stocks, for instance. Discussing humans’ primary fear of loss, he writes, “Marketers know you don’t want to experience loss: neither the loss of something you possess nor the loss of something you nearly possessed. The most poignant song in the musical South Pacific is ‘This Nearly Was Mine.’” It’s a clever way to get us to understand just how hating to lose can make investors do just that — lose.

 

Fear of losing is one of the essential issues people need to get over to make money, explains Tobak. It’s fear of loss that causes investors to commit the cardinal error of selling into a collapsing market, leaving braver types (like Buffett and Charlie Munger) to pick up a slew of bargains. The 2008 crash was a perfect example: Berkshire Hathaway bought Wells Fargo at a paltry $8 a share. Now? It’s up well over $50 a share.  Having fortitude for the long haul is what makes people rich, despite our hunger for that golden lottery ticket. As Tobak explains, the market has far better odds when approached like a marathon instead of a sprint.

 

Another flaw in most people’s approach to money is being blind to compound loss as well as compound interest. Stashing money in a savings account making less than the rate of inflation is bad enough — we’re losing money over time. But squirreling that money away instead of paying down a credit card debt with a high rate of interest is even worse. In his reasonable, no-nonsense way, Tobak is like your cousin the accountant doing an uplifting, funny Ted talk. It shouldn’t really be that much of a revelation that if you’re saving money but not investing it, you’re not actually saving at all. But that’s the kind of myopia too many people have. And this book, a quick read at under 100 pages, and well organized so readers can dive into key sections at will, is the perfect set of clear (not rose-colored) glasses to cure it.

 

Learn more about Mark Tobak, MD at www.marktobak.org