Live on the Margin Paperback – December 16, 2012

About a year ago, while searching out blogs written by sailing adventurers, I discovered the Bumfuzzle blog. Much to my wife's chagrin, I spent the next 2 days reading the blog beginning to end... well, up until the disposition of their cruising catamaran. I'm interested in retiring and sailing around the world. I didn't have any interest in reading about driving from Alaska to Argentina in a VW mini-bus. That's just nuts! But throughout the read, one recurring thought would not go away... how were they paying for their travels? Rich parents with a trust fund? Did they win the real estate lottery in Chicago before the crash of 2007 and cash out big on their condo? Pat would drop hints here and there about market trading paying the tab for an engine failure, and a paragraph or 2 about leaving the Chicago commodities exchange behind, but nothing detailed or specific."Life on the Margin" is the answer... and a bit more. Once again I delved into the Bumfuzzle world... this time learning about the Bumfuzzle philosophy of life and finance.This book is worth the read.That said, I almost didn't make it a third of the way through. When I hit the part about "buy and hold is a crock of ****," I almost set it aside. I've seen this before. Financial "experts" marketing a trading system, that if it worked they would keep to themselves and be bazillionaires, but doesn't so instead they peddle it to the uninformed. It all starts with "saving money is for suckers" or some such non-sense. As a long term successful buy-and-hold investor of the Graham / Buffett style, I was not pleased.The one thing that kept me reading was the knowledge that they were obviously successful enough to support their "margin" lifestyle. This is different from my experience. Every "day-trader" I knew treated the market like a casino... big talk at the water cooler, but press them for details and you find out that they are all flat broke, every one, no exceptions.Without giving away the details, and despite that those who are living on the "margin" may find it a bit offensive, it turns out that what they do is not much different than what a value investor does. Become well informed about good quality stocks, and make a move when market sentiment (or other non-fundamental force) is moving a stock in the wrong direction. And, behind the graphs and the "greeks", understanding when the market is wrong is based on sound economic principles. Where the value investor wants to use the market error buy cheap and accumulate, the trader wants to use the market anomaly to profit in the short term and then move on. Simple to learn, difficult to master.That said, the majority of this book is spent cheer-leading the idea of live on less and love how you spend your time, not your money. You don't own stuff, stuff owns you. Manage the risk of life, not just finance. I'll be the one in the front row of the choir singing "A-men!" However, someone looking for 20 different trading algorithms or some sort of guaranteed system to simply plug into with no effort, then sail off into the sunset, will be disappointed.I've never had an interest in using options before, but after this I'm looking forward to laying out a bit of "mad money" to test their ideas. Nice work!

I followed Pat's blog for a couple of years. I used to wonder "Ok, sure, they have downsized their life-style, but damn, how do they afford it?"The "work hard, save your money" answer just was not working for me - so it was interesting when Pat 'fessed up and said "Hey look, this is how I do it..."I've tried trading in various ways, never with consistent success, so it was great when Pat and Nick put this book together. It holds your hand in terms of leading you in to how to think about trading and supplying two trading patterns. It also leads you to doing more research and learning as you go.A lot of things in life depend on you believing that it can be done - if you can believe that, then it becomes easy (example: the sub 4 minute mile - it was 'impossible' to run a mile in less than 4 minutes - until Roger Bannister did it - and once he had done it a number of his competitors achieved it soon after - because it was no longer 'impossible').This book is like that - 'Look, this is what we do, it can be done.' Means that people like me can say, 'Ok, I can do it too'.There a couple of caveats - Pat was a trader for a number of years, so he has paid his dues. A new trader is going to have to pay his dues as well - but so what? Limit your losses until you get to a stage where you are continuously profitable, and then start risking a bit more. It's not going to happen overnight, but if you persevere, it will happen.And sure, they are 'selling the dream' - but so what? Commit to it, and you can have the dream too.

I am a full time cruiser, retired and traveling with my wife and cat on a small pension on a small sailboat. I've followed Patrick Schulte's blogs over time and enjoy his easy forthright style. The authors make a fine case for "Living YOUR Dream," and how to pay for it. The first half of the book talks about doing it NOW, as an early; temporary; or occasional retirement. I found the trading part enlightening, even though I have studied and invested most of my adult life. As a Blue Chip Buy and Hold investor, I am leery of the technical side of trading with its chart parsing minutia. This book has lifted some of the cloudy veil that surrounds this part of the investment market. I find that I look at charts and data in a whole new light. Whether I jump in to what the authors remind us is a gamble remains to be seen. They recommend practicing the method with paper "Bets" before laying hard cash on the line. Coming out ahead is a skill that can be developed and with practice the odds can lie in your favor. I do have one gripe about the book (kindle version,) the illustrations of the charts and graphs are awful to the extent as to be worthless. . For a topic which relies so heavily on graphics and is somewhat obtuse to begin with, I find this defect to be glaring. Also for the record, Patrick and his family have just announced that they are moving off the boat and on to dry land. FAIR WINDS BUMFUZZLE=====&====LIVE YOUR DREAM

I'm a rank novice in investing and find most books on the subject boring and hard to understand. I found this book most readable and even enjoyed it. I actually am starting to understand the markets.

I have just started my copy of Live on the Margin for Kindle and have to say I am impressed. I have followed Pat and Ali's blog for the better part of two years and read their Bumfuzzle book. This book combines the laid back style of Pat with the writing skills of Nick to create one of the better finance books out there currently. They describe normally boring financial terms in easy to understand examples that most people will be able to understand. I'd happily recommend this book so far and while I am still only part way through I am looking forward to sitting to read the entire thing cover to cover.

It takes some clear thinking to communicate a complex subject simply without over simplifying. This book explains its chosen area of stock trading beautifully. If you want to learn how to trade - in the short term - you could do much worse than to thoroughly digest this book.