Can anyone really learn to build wealth like legendary investors Warren Buffet, Charlie Munger, and Benjamin Graham? Yes, I think anyone with the desire and discipline can. Phil Town, the author of Rule #1 Investing, turned $1000 into $1.45 Million in only 5 years. Continue reading to discover how he did it.
Book: Rule #1: The Simple Strategy for Getting Rich–in Only 15 Minutes a Week!
Price: Kindle $14.99 (Click Here to Purchase)
Website: Rule1Investing.com
Author: Phil Town
Opinion: Recommended
Update 7 August 2021: Phil Town, the personality behind Rule #1 investing has two books available on Amazon. These books are Rule #1 and Payback Time. Both are excellent introductions to the strategy of value investing and well worth their modest cost.
I wrote the post What is Rule #1 Investing after attending a free investing workshop hosted by Phil Town and his associates. The workshop was intense to say the least and covered too much information to absorb in just one weekend workshop. That was in the pre-pandemic age when we were permitted to freely travel and assemble. Phil Town has hosted some online training events since then.
When I attended the Rule #1 workshop it was free and there was no mention of any paid training. However, I left the free workshop with a lot of questions. After the workshop, as I reached out to Phil Town’s associates for answers, they suggested I consider their paid training, which cost $24,000 at the time.
The strategy taught in the book Rule #1 is simple to understand and you will not need a workshop to put it to use. However, there is an options trading aspect of the more advanced application of Rule #1 Investing and this is quite complex. It also involves more risk.
If you are interested in investing in stocks, I do recommend Phil Town’s books and the free workshop. However, because I did not get the paid training, I cannot honestly comment on it. A reader who said she purchased the paid training and regretted it left a comment about her experience. Here is what she said.
When I met Phil Town I was impressed and held him in such a high regard, although my perception changed after joining the course.
There is nothing different or that gives you a competitive advantage in the fundamental or advance strategies that you can’t learn for free or in a Ben Graham’s book or in the webinar and exposed all over FB and YouTube. The way the course is conducted is restricted and doesn’t allow interaction with the students or instructor unless via chat, that within itself says a lot.
Now in order to get your questions answered you need to present them in writing a different day. How are you supposed to integrate the concepts of what is being presented? Is is an absurd way of operating, inefficient from every angle.
Bottom line this course is way overvalued for the quality of instructors and information that is offered for free if you willing to look for, very disappointed to find that there is not such altruism from Phil, this was strictly a sales pitch and the instructors are in sales and motivation, nothing more.
I was reluctant to join initially but because of Phil’s reputation I did join, paid and I regretted, I was offered satisfaction guarantee of try it for a month, a total manipulation.
I feel rob and so stupid after almost a year, this is not even a market loss trying to make something happened in a very difficult period of time, but a straight out deception. Certainly MOS doesn’t apply to their products, this is worth 1,000 the most.
Don’t fall into this trap or any other that may be up there. I did join because of Phil Town’s reputation, but came to a hard realization. Now great part of the revenue is used to suppress bad reviews, be aware of that too.
– Carolina
What is Rule One Investing?
If you want to know how to invest like Warren Buffet and many of the top hedge fund managers, read Rule #1: The Simple Strategy for Getting Rich–in Only 15 Minutes a Week! The title of the book comes from Buffet’s rules for investing which are #1 Don’t lose money and #2 Remember rule #1.
Rule One Investing is a simple, yet extremely logical approach to creating wealth through investing in corporate stocks. It stresses the importance of remaining rational and understanding the business you invest in. Contrary to the popular strategy of diversifying your investment portfolio to spread the risk of loss, Rule One Investing focuses on only a few companies. The risk is minimized with the Rule 1 strategy by thorough research and analysis of the company.
Rule #1 is the author’s, Phil Town, style of Value Investing. Value Investing analyzes a stock’s potential for growth based on its intrinsic value, a system developed by Benjamin Graham. It was Graham who taught Warren Buffet and it was a student of Buffet who taught Phil Town.
Phil Town did not start out to be a successful investor and hedge fund manager. In 1980, he was a Grand Canyon river guide making $4,000 a year. Then he met the man who had learned to invest from Warren Buffet.
“Follow Town’s simple, time-tested precepts, and even unsophisticated investors will leave most mutual fund managers in the dust.” Arthur Levitt, Former Chairman, SEC.
“Rule #1 is the clearest & best book out there to get you on the path to riches.” James Cramer, Host of CNBC’s Mad Money and a co-founder of TheStreet, Inc.
Warren Buffet and Benjamin Graham.
Buffet learned from Benjamin Graham, his teacher at Columbia Business School and the author of The Intelligent Investor. Graham is said to be the father of “Value Investing,” an investment strategy that has proven itself since 1930.
In his book, Rule #1, Phil Town strips away the confusing language of investing professionals and teaches Value Investing as a simple strategy anyone can use to build wealth.
Click to DISCOVER a Proven Path to Financial Independence!
Buy Low. Sell High.
The success of this strategy is based on the simple concept of buying low and selling high. Rule #1 shows you how to buy the stock at a 50% discount when the market has mispriced them too low and then sell them when the market has mispriced them too high.
Rule #1 Investing begins with finding a stable company with good management that you can understand and that you like, and that also has a durable advantage in the marketplace. A durable advantage is an edge a company has over the competition. This durable advantage might be a brand or patent or a regional monopoly.
With a durable advantage, the future value of a company’s stock can be determined with a reasonable degree of accuracy.
Based on the future value of a company’s stock, we can extrapolate the current value of each share. Once we know the current value, we can easily calculate the 50% discount price. When we know the discounted price, we wait for an event that will cause the stock to go on sale.
Patience is a Virtue.
Here is where Rule #1 Investing is different. As a Rule #1 Investor, you wait for as long as it takes for the stock to go on sale. It could be months or it could be years before an event occurs to knock the price down to the bargain range.
Maybe the event is an oil spill that drives down the stock price of an oil company or an E. Coli outbreak in a restaurant chain. As I write this, the threat of tariffs on imported Chinese goods is driving down the stock price of discount stores.
Naturally, you watch several stocks so the odds are good that one will go on sale within a reasonable time.
Fear and Greed.
The price of a stock is governed by fear and greed.
A wise investor buys on fear when an event has spooked everyone else into selling. And, the wise investor sells on greed, when everyone else is in the throes of irrational exuberance and over-paying for stock.
The key to succeeding with Rule #1 Investing is to understand the true value of a stock. That’s where the analysis taught in Rule #1 is essential. Through analysis, you will know if an event will destroy a company or merely knock the stock price down for a few months. Buy low. Sell high.
The principles of Rule #1 Investing have been around for nearly 80 years. However, for most of this time, getting the necessary information was difficult and laborious. Phil Town’s Rule #1 brings the strategy of Graham and Buffet into the information age. Now anyone can find the information they need online and use it to create wealth.
Essential to success with this strategy is to find solid companies. It starts with companies you are familiar with and that you like. Phil Town also has resources that significantly speeds up the process of finding worthy companies to consider.
The Small Investor Advantage.
Some critics of Rule #1 argue that it is impossible to find companies that meet the criteria of Rule #1 Investing because hedge fund manager’s snatch them up. This is not true.
Because hedge fund managers manage huge sums of money, they cannot move in or out of the market quickly. If they move too quickly, they might crash the market.
Hedge fund managers must take weeks or months to move in or out of a market position. As a small investor, we have a massive advantage. We can move in or out of the market in minutes. If we’re observant, we will see what the large hedge fund managers are doing and get in or out ahead of them.
If you want to know how to invest in stocks, buy this book. It will teach you the foundation of Value Investing.
More than the Book.
If all you have is the book and determination, it’s possible to become a successful investor. However, Phil Town has a lot of resources to help you master Rule #1 Investing, including online tools, a YouTube channel, and a free weekend workshop.
I had the good fortune of attending Phil Town’s free workshop. While there, I met several people who have succeeded with Rule #1 Investing, including several hedge fund managers.
Rule #1 will not make you rich overnight, but it will show you how to earn a minimum annual rate of return of 15%. The promise of creating wealth in only 15 minutes a week may be factually true AFTER you learn the strategy. However, the most successful investors continue to read all things related to the companies whose stock they own.
Other Considerations.
In my experience, people I have introduced to Rule #1 Investing react in one of two ways. It either bores them to tears or it excites them so much they can’t sleep.
When I first discovered Rule #1 Investing, I thought I had found the keys to the kingdom. At the workshop, most of the people shared my enthusiasm.
If the idea of learning to invest like Warren Buffet excites you. Buy the book. Read it. It’s a small price to pay for all you will learn. After you read the book, go to Phil Town’s free workshop. It really is free, no gimmicks, no gotchas, and nobody will try to sell you anything.
Click to DISCOVER a Proven Path to Financial Independence!
Where to Begin.
Beyond buying the book and attending Phil’s free workshop, you will need money to invest. Expect to deposit a minimum of $2000 to open a brokerage account.
If you don’t have the money to invest, consider starting an online business. The Online Entrepreneur Certification Course will show you how to launch a profitable affiliate marketing business. The first 10 lessons are free.
To learn more, Click Here.
If you found this article helpful, or have experience with Rule One Investing, please leave a comment below. Thank you.
I have just read the book and tried to apply it to the Australian markets. Its does not work and I have tried it on a number of stocks. For example, I selected this company Pro Medicus(PME.AX) , it has a PE of 125 and EPS of 0.36. I got a sticker price of $140 and a MOS price of $70.00.It currently trades at $46.00 and the highest its ever been is $61.00 – it does feel right to go ahead. I’ll appreciate any comments.
Hello This is Paul Szabo, I finished the rule one courses in November 2021. I am wondering how I go about getting a token to inter the rule one fund, if someone could shed some light on the subject, I would appreciate it. Best regard, Thank you!
When I met Phil Town I was impressed and held him in such a high regard, although my perception changed after joining the course. There is nothing different or that give you a competitive advantage in the fundamental or advance strategies that you can’t learn for free or in a Ben Graham’s book or in the webinar and expose all over FB and YouTube. The way the course is conducted is restricted and doesn’t allow interaction with the students or instructor unless via chat, that within itself says a lot. Now in order to get your questions answered you need present them in writing a different day. How are you supposed to integrate the concepts of what is being presented? Is is an absurd way of operating, inefficient from every angle. Bottom line this course is way overvalued for the quality of instructors and information that is offered for free if you willing to look for, very disappointed to find that there is not such altruism from Phil, this was strictly a sell pitch and the instructors are in sales and motivation, nothing more.
I was reluctant to join initially but because of Phil’s reputation I did joined, paid and I regretted, I was offered satisfaction guarantee of try it for a month, a total manipulation. I feel rob and so stupid after almost a year, this is not even a market loss trying to make something happened in a very difficult period of time, but a straight out deception. Certainly MOS doesn’t apply to their products, this is worth 1,000 the most.
Don’t fall into this trap or any other that may be up there. I did joined because Phil Town reputation, but came to a hard realization. Now great part of the revenue is used to suppress bad reviews, be aware of that too.
Hi, Carolina,
Thank you for your detailed comment. I agree. I should have revised this post a long time ago to reflect the points you make.
Thanks again,
Gary
Gary you are fascinating and very good at explanations like what I have seen here. I would love to follow what else you are the scamavenger for. Can you add me to follow you, or how do I follow you?
Thank you Patience for your kind words. Yes, I will add you to my email list.
Hi Gary, I took Phils workshop this year. Are familiar with his coaching program that is part of the follow up? Tks David.
Yes, I’m familiar with his coaching program, although I am not a member. In the program, you learn to be a hedge fund manager and focus on option trading.
Hi Gary,
Bumped into your article whilst I was looking for a review on Phil Town`s Rule#1 Investing Free workshop. I have been following Phil`s videos and articles for a week by now and I am very tempted to attend his free workshop.
I have always been interested in investing, but honestly, listening and reading many sources available on the internet, which is overwhelming, I often end up with a bunch of sales/marketing pitch, trying to force you to buy something.
As I don’t live in the US, I have my own reservation about the offer though (you know what I mean).
Before confirming my registration, I`d like to ask you a few questions about Phil`s workshop you attended to:
1. Although Phil`s calculator is very helpful, finding those numbers in the financial reports of a company is another story. The ability to read the Financial Report is not everyone`s faculty, unfortunately. My question is did Phil show you using a real example of financial reports, where to look up those numbers (i.e equity numbers plus dividend – diluted/reserve, as I know the numbers are not straight forward, needing some works before entering to his calculator)..? As every report of a business is not always the same, did he also teach you how to logically interpret the important financial terms stated on financial reports into “plain language” .?
2. After completion of this workshop, is it a non-bargain step to sign up for his paid subscriptions, such as Seeking Alpha and Guru Focus..? Could you please briefly explain what are those two for..? What if we didn`t sign up for those (software etc), could we still be able to implement his teaching using a manual calculation to find “wonderful” businesses..?
3. What benefits do we get from those subscriptions, are we able to contact Phil and his team for their feedback and inputs..?
I look forward to hearing from you.
Many thanks in advance, Gary.
Hi Gary,
I just attend the rule#1 workshop recently. Apart from this workshop and ruleoneinvesting.com monthly subscription, I heard that there is an paid training course up to US$10K in order to master the skill. Is that true or I am wrong?
Hi, Lily!
The paid course is for people who want to be hedge fund managers or who have a large financial estate to manage.
An individual investor can use what they learned in the free workshop, Rule#1 books, podcasts and supplemental training.
There also was a workbook sold at the workshop for about $20 that was helpful.
Rule#1 has a software program which is about $30 a month. It makes the job of finding, tracking and analyzing companies
much easier and faster.
It’s also helpful to subscribe to some of the paid sources for investing information mentioned in the workshop, like Seeking Alpha.
It’s been about 18 months since I went to the Rule#1 workshop. At that time, the paid training was $24,000 for three years and it was possible to
pay approximately $9K each year.
I’m not an affiliate for Rule#1. They don’t have an affiliate program. And I don’t push the paid course because it’s really
for people who want to invest large sums of money.
There are two tracks in the Rule#1 training, buying stocks at a steep discount and trading options.
The Rule#1 strategy for buying stocks at a discount is straight forward and all that most investors will need.
The Rule#1 books and free workshop cover that.
The option trading strategies are more complex and intimidating but permit a greater return faster. It is my
understanding that the paid training covers the option strategies.
If you have a large sum of money to invest, like $500K, or if you want to be a hedge fund manager
and invest other people’s money, I think the paid training would be well worth it. It would be
an education directly from successful hedge fund managers.
However, if you are investing your own money, the free workshop, Rule#1 books, workbook, podcasts and software
will get you there.
Great question. Thanks for stopping by,
Gary
I just attended the workshop and I’m trying to find reviews of his mentor program. Do you know where I can find reviews from people who have paid for the group mentoring that’s offered after the workshop?
Thanks!
Hi, Mary!
I have not found any reviews about the paid training either. I have investigated it and learned that the paid training costs $24K for three years of training. This same training can be paid for in six-month increments at $9K per six-months. In addition to paying for the course, you’ll need a minimum of $3K in a trading account. You will also need a paid subscription to Seeking Alpha and Guru Focus.
I suggest that you do not enroll in the paid trading until after you have digested all the material from the free workshop, including a thorough understanding of the options strategy. Then enroll for the first 6 months and see if the training is for you.
Thanks for stopping by,
Gary
Hi Mary, did you happen to go ahead with the mentor program? I just finished the weekend workshop and I am trying to see if I can get some reviews from people who have gone through the program!
Hi,
What is your opinion about this review? badmoneyadvice.com/2009/02/phil-towns-rule-1-part-1.html
Hi, Yadnesh!
I’m not sure why this writer is critical of Phil Town and Rule One Investing. The strategy Phil Town teaches is not new to him. It was first developed and refined by Benjamin Graham as Value Investing. Rule One investing is merely Town’s specific style of Value Investing.
Value Investing has been proven to be a reliable strategy for 70 years. It is the strategy that Warren Buffet and his friend Charlie Munger used to amass billions. Many top investors are Value Investors. It is the only stock investing strategy I recommend.
In the article you mention, the writer implies that Value Investing worked during the Great Depression but won’t work now because few companies match the criteria for Value Investing. It is true that there are few companies presently available that meet the critieria for a sound investment according to Rule One Investing. This is because the stock market is over-priced. However, there are companies available. JetBlue and CERN are two that come to mind.
Like many investors and economists, Phil Town expects a major market correction in the near future. If a market correction occurs as Town, Buffet, Munger, Jim Rogers and many others expect, there will be hundreds of companies selling stock at bargain prices. For those familiar with Value Investing, it will be a once in a lifetime opportunity to create generational wealth.
Thanks for stopping by,
Gary
Thanks for the article. My neighbour is heavily into this type of thing and I will certainly recommend your review to him. I think he would love the book.
Just wondering if you went down the investment track? I’m always looking to diversify and while I’m new to affiliate marketing I wonder if I should investigate this a little more.
Thanks again.
Hi, Heidi!
I recommend Rule One investing to anyone. There is a bit of learning curve, but the author, Phil Town, is a terrific teacher.
I’ve been a value investor since the 1970’s but only discovered Rule One Investing this year. Value investing is the approach to investing that Benjamin Graham developed in the 1930’s and Warren Buffet made popular. Rule One Investing is Phil Town’s style of value investing.
The foundation of value investing is to find solid companies with predictable growth and buy them when they are on sale.
Thanks for stopping by,
Gary
This certainly sounds interesting Gary. I have always found investing to be a little bit dodgy to be honest. I’ve always felt it to be more like gambling than making money which takes away all the appeal for me. This looks like something I may for the first time find intriguing and practical. I love the 2 rules which are the ones that I like to work by myself. There is no point in losing money in an attempt to make some. It just does not make sense to me. Thanks for recommending this book, I’m tempted to get it.
Hi, Lynne!
I’m glad you found my article about Rule One Investing helpful. I agree, most investing programs can be questionable. Even financial professional like to keep it mysterious and difficult to understand so you will hire them instead of managing your own investments.
The author, Phil Town, makes value investing easy to grasp. As a minimum, I recommend using Rule One investing to grow a retirement account.
Thanks for stopping by,
Gary
Gary,
I am green to investing. I attended the free workshop offered, finding it intriguing and somewhat overwhelming because of the level of information shared. I signed up for the first phase of classes that I am nearly finished with. I have to say that as hard as I have studied and listened and taken notes and listened to again and again, the concepts are still very abstract and take more than a fair amount of study. So to say it’s easy to grasp, I don’t see that. Because of the level of investment I doubt I will cease trying to grasp this but at this point it’s still miles over my head.
Hi, Kay!
Thank you for sharing your experience with Rule One Investing. I agree the free workshop is intense, like drinking from a fire hose. After the workshop, it took weeks for me to fully digest all I had learned. Also, I think part of the struggle many people have is the terminology.
It helped me to divide the Rule One Investing strategy into two parts. One part is choosing wonderful companies based on the Rule One criteria. I found this easy and fun. To my knowledge, Phil Town’s daughter only chooses wonderful companies. She does not trade options. Also, it helps to find wonderful companies if you subscribe to Guru Focus and Seeking Alpha. The information there is invaluable.
The second part of Rule One Investing is options trading. I’ve been taking that one strategy at a time and haven’t gotten very far. To me that is the most confusing and intimidating.
Thanks for stopping by,
Gary
Hi Kay! I just finished the weekend course and I am trying to decide whether or not to go through with the next phase of mentoring. By the sounds of it, it seems pretty intense! I’m motivated to learn, but I just need to know if it will be worth my time and money!
Thank you,
Megan
Gary,
Very interesting article. I love the concept, and the advice is certainly sound (buy low and sell high is always a good idea!). The only thing I question is the average persons ability to take the emotion out of the equation. Certainly the meltdown of 2008 was the result of people panicking and rushing to sell. It takes someone with extraordinary self control and discipline not to get caught up in those scenarios.
Hi, David!
Indeed! Emotion can ruin an otherwise solid investment strategy. With Rule One Investing you will generally only invest in a few companies and know those companies very well. Before investing you will write an analysis of the company and know why you are buying its stock. The reason you bought the stock is the story. It’s the why.
Probably the most intense emotional moment with Rule One Investing is to buy more stock when an event makes everyone else dump it and run for the doors.
Key to the strategy is to know the company you invest in extremely well. Rule One Investing takes you through a process of analysis so you know what the company is worth even if it went bust. You also know what the future value of the company. You also know if the event that caused the stock to plummet is a temporary thing or if it will break the company.
Finally, you know how to read the indicators that tell when it truly is time to cash out and take your money out of the market.
Ultimately, because of the preparation before buying a stock and establishing a logical reason to buy it, when an event fills everyone else with fear and they dump the stock, unless the story, the reason why, has changed. There is no cause for panic. In fact, as the price falls, there is every reason to buy more of it because you know from your research the company is worth a lot more per share.
Thanks for stopping by,
Gary
Do you need technical stock charts in order to this type of investing successfully? A lot of my friend invest from a technical trading perspective and I assume they need charts to do so. Also through the value investing analysis, if you anticipate the event driving a stock price down, do you ever short sell or buy a put option?
Hi, Jessie!
Generally speaking, a Rule One Investor anticipates holding a stock indefinitely, but will move in and out of the stock over the years to take gains and buy more. When an event drives the stock price down, a Rule One Investor will buy more stock if they can determine the event is temporary.
The foundation of Rule One Investing is to be very knowledgeable of a few companies. Unlike many stock investors, a Rule One Investor only owns stock in a handful of companies, and they are very familiar with the companies they own. Then they purchase stock in these companies at a steep discount. Options are traded to earn money on the stock while they hold it or to buy the stock at a discount.
Charts are used to track the stock and to measure the mood of the market. Charts are also used to get an early warning to when it’s time to exit the market.
Thanks for stopping by,
Gary
I have gleaned so much information from your post. It provides excellent solid advice on investing.
The book is definitely something I need to read.
Learning about the history of Warren Buffet and other investors was very interesting.
Do you think that with the internet age and all the startups operating opens a vibrant platform for investment?
Hi, TaniaHersels!
I’m glad you found my article about Rule One Investing helpful. Rule One Investing simplifies and demystifies stock investing. Once you understand the strategy, it takes very little time to manage your investments. A key difference between Rule One Investing and other strategies is waiting for the optimum time to buy and sell.
You asked about startups. Rule One Investing strives to eliminate as much risk as possible. Startups are high risk because there is no history of the business. Rule One Investing only invests in businesses that are ten years old or older. The history of established businesses provides the foundation of a thorough analysis. It allow us to get a reasonable idea of the future value of a business.
As you may know, a number of recent startups were scams that garnished millions of dollars of investors money only to go bankrupt soon after.
Thanks for stopping by,
Gary
Thanks for this great post. I really enjoyed reading it as investing is something I have always been interested in — but frankly don’t have much knowledge in.
This book sounds like it could be a real page turner and help open my eyes in how to go about investing for my future.
Have you personally bought the book, and if so how did you like it?
Hi, Michael!
Yes, I have book and have read it. Plus, I’ve also attended the free Rule 1 Workshop. I highly recommend Rule 1 Investing. If you learn only one way to invest, learn this way. It’s the same strategy used by the most successful stock investors of the past 80 years, including Benjamin Graham, Warren Buffet and Charlie Munger. Incidentally, Graham made a fortune during the Great Depression using the strategy taught in Rule 1 Investing.
Phil Town, the author of Rule 1 Investing is a hedge fund manager and a self-made multimillionaire. He wants people to learn his investment methods and offers a totally free workshop each month in the Atlanta area. The workshop is really free and it’s intense. When was the last time a multimillionaire offered to teach you how to invest?
In my experience, the Rule 1 Investing strategy is the fastest way to grow wealth with the least amount of headaches and stress. Michael, if you learn and apply Rule 1 Investing, you can accumulate wealth that will change the course of your family for generations.
People seem to respond to Rule 1 Investing in one of two ways, either they are excited about it, or they couldn’t care less. If Rule 1 Investing resonates with you, buy the book. It’s only about $15 on Amazon. If you like what you see in the book, go to the free workshop and master Rule 1 Investing.
Thanks for stopping by,
Gary