Eric Tyson - Details for Investing for Dummies

Eric Tyson is an internationally acclaimed and best-selling personal finance author, lecturer, and advisor. Through his work, he is dedicated to teaching people to manage their money better and to successfully direct their own investments.

Eric is a former management consultant to businesses for which he helped improve operations and profitability. Before, during, and after this time of working crazy hours and traveling too much, he had the good sense to focus on financial matters.

He has been involved in the investing markets in many capacities for more than three decades. Eric first invested in mutual funds back in the mid-1970s, when he opened a mutual fund account at Fidelity. With the assistance of the late Dr. Martin Zweig, a famous investment market analyst, Eric won his high schools science fair for a project on what influences the stock market. In addition to investing in securities over the decades, Eric has also successfully invested in real estate and started and managed his own business. He has counseled thousands of clients on a variety of investment quandaries and questions.

He earned a bachelors degree in economics at Yale and an MBA at the Stanford Graduate School of Business. Despite these impediments to lucid reasoning, he came to his senses and decided that life was too short to spend it working long hours and waiting in airports for the benefit of larger companies.

An accomplished freelance personal finance writer, Eric is the author of numerous best-selling books, including For Dummies books on personal finance, mutual funds, taxes (coauthor), and home buying (coauthor). He is also a syndicated columnist. His work has been featured and quoted in hundreds of national and local publications, including Kiplingers Personal Finance Magazine, Los Angeles Times, Chicago Tribune, The Wall Street Journal, and Bottom Line/Personal and on NBCs Today Show, ABC, CNBC, PBSs Nightly Business Report, FOX, CNN, CBS national radio, Bloomberg Business Radio, National Public Radio, and Business Radio Network. Hes also been a featured speaker at a White House conference on retirement planning.

To stay in tune with what real people care about and struggle with, Eric maintained a financial counseling practice for many years.

You can visit him on the web at www.erictyson.com .

Actually, before I get to the thank-yous, please allow me a really major thank-you and dedication. This book is hereby and irrevocably dedicated to my family and friends, as well as to my counseling clients and customers, who ultimately have taught me everything I know about how to explain financial terms and strategies so that all of us may benefit.

First, Id like to thank Elizabeth Rea. Thanks also to Danielle Voirol for all of her fine editing and to all the fine folks involved in making this book and all my charts and graphs look great! Thanks also to everyone else who contributed to getting this book done well and on time.

And last but not least, a tip of my cap to the fine technical reviewer who helped to ensure that I didnt write something that wasnt quite right. For the seventh edition, this important job was well-handled by John Nelson.

Publishers Acknowledgments

Acquisitions Editor: Stacy Kennedy

Project Editor: Elizabeth Rea

Senior Copy Editor: Danielle Voirol

Technical Editor: John Nelson, CFA

Project Coordinator: Patrick Redmond

Cover Image: iStock.com/TPopova

Chapter 1

In This Chapter

Defining investing

Seeing how stocks, real estate, and small business build wealth

Understanding the role of lending and other investments

Knowing where not to put your money

In many parts of the world, lifes basic necessities food, clothing, shelter, and taxes gobble the entirety of peoples meager earnings. Although some Americans do truly struggle for basic necessities, the bigger problem for other Americans is that they consider just about everything eating out, driving new cars, hopping on airplanes for vacation to be a necessity. Ive taken it upon myself (using this book as my tool) to help you recognize that investing that is, putting your money to work for you is a necessity. If you want to accomplish important personal and financial goals, such as owning a home, starting your own business, helping your kids through college (and spending more time with them when theyre young), retiring comfortably, and so on, you must know how to invest well.