Book Review - The 25% Cash Machine

Part of what separates an Investor and a Speculator is the amount of financial education that each type believes is adequate for success in the financial markets. A Speculator figures that a couple of reports from analysts and a quick look to make sure the charts look 'good' is enough information to buy into a position. An Investor knows that there's a lot more to an investment than that and, in truth, that a financial eduction is never complete. There's always something more to learn and there's usually a new type of financial vehicle to study.

Bryan Perry's book, The 25% Cash Machine: Double Digit Income Investing, was published in 2007 just as the very beginnings of economic crisis were starting to gather into the current fiasco we enjoy now in 2009. There is still a lot to be learned from this book, even if now is not the right time to implement all of his strategies.

This is not a book for the novice investor. If you are not ready to redeem your mutual fund shares for individual stocks that you've picked or you are not familiar with the differences between a Mutual Fund and a REIT or Exchange Traded Fund, you should be reading books that cover the basics of the markets. However, if you have been using DRIPs, REITs and ETFs already, you should be able to grasp most of what is covered with little problem.

Perry does spend the first 57 pages telling you about why things don't work well enough. As there are only 187 pages of text, this was a little long for my personal enjoyment, but it was nice to be in comfortable and agreeable territory. Starting around page 61, Perry gets down to revealing his secenarios for double digit investing and this got interesting.

There are several investing vehicles described in the book that are not traditional and each is covered rather thoroughly. The only real drawback is that some of the examples used have already been altered due to new taxation regulations. Specifically, Canadian Royalty Trusts face a change in taxation starting in 2011 that will reduce dividend payments down to a 2% - 3% level and will not generate the kind of income that Perry is looking for. This development does not exclude them as excellent vehicles for investment, just means that the level of return will most likely be greatly reduced.

Perry's take on Dynamic Sector Rotation is very good and still applicable for 2009. This is a concept that will have an investor taking a really good look at their present and future holdings and determining just what is really going on at various times of the year, month or even day. Equally valuable is the explanation of Closed-End funds, which dispelled a lot of myths for me personally regarding this type of investment vehicle.

Overall, there is a lot of good information to be gathered from The 25% Cash Machine; information that you will be able to use in making better choices for your personal portfolio. It's not the last book you'll ever read about investing - HOPEFULLY - but it is worth keeping a copy close to hand .