Manage My Money!

[Al Kufr]

Does anybody know any good books on how to manage your money?

A friend recommended Suze Orman's 'The Money Book for the Young, Fabulous & Broke', does anybody have this book? or can anybody recommend some other good book?

[softwareNerd]

Haven't read Suze Orman's books, but I've seen her show and she sounds reasonable. Are you considering educating yourself to plan and manage your finances directly, or do you want to learn enough to be able to deal with a professional advisor?

[scottkursk]

 

Does anybody know any good books on how to manage your money? 

 

A friend recommended Suze Orman's 'The Money Book for the Young, Fabulous & Broke', does anybody have this book? or can anybody recommend some other good book? 

 

I have serious issues with Suze Orman because she ignores some very important issues when it comes to mutual fund investing amongst other things. But unless anyone wants me to bore you, I will skip over her glaring inadequacy's as a financial advisor. But then there are also a large number of issues about her that I do not like when it comes to her advice. I think she thinks much to short term when it comes to investing. Plus I personally feels she has an axe to grind against full service brokers (of which I am not one BTW anymore) and their firms that reeks in her advice.

Personally, I have recommended to clients that they give their kids or other young (read below 30) people about finance is the Wealthy Barber by David Chilton. Just find whatever the most recent edition is. The big difference between his books and others is he does the teaching of a holistic (and I don't mean in the new ageish BS filled sense of the word) financial planning using a story of 3 people. He tells their stories and uses the examples of their choices and shows the long term consequences of those choices on their lives. It really does go beyond the basic "here is how to pick a stock or mutual fund" type book and concentrates on how to live your life with the idea of your long term financial outcomes as a basis of your current actions. I'd pick him any day of Suze Orman. Suze Orman is new age voodoo BS as far as I'm concerned wrapped around a tiny handfull of a few good ideas.

A bit more advanced but REALLY good is Yaron Brook's Investing: An Objective Approach that pretty much strictly focuses on the investment side of your portfolio. He does a really great job of defining the financial markets, and builds up from there. He uses a real rational approach to build a portfolio from that.

If you are interested in a book on trading, the only thing I'd recommend is giving your money to ARI or someone else. There is an old adage: traders loose. Or another that bulls and bears get rich and pigs get slaughtered. If you insist on trading or taking a short term more "aggressive" approach, I would recommend an older book by John Hoenig called Greed Is Good : The Capitalist Guide to Investing by John Hoenig from Capitalist Pig Investing. John as far as I've read from his book sucks significantly less than others. Actually, I like John both as a hedge fund manager and as a person. I tend to personally dislike traders but John has a really good head on his shoulders.

Due to my employment contract, I've got to say that these opinions are strictly mine and not that of my employer and in no way reflect that of my employer. etc. etc.

Really, what are your personal goals? Where are you now and where do you want to go? You honestly do need to answer those two questions before getting on to the next step. I literally tell people 50 times per day; investing isn't' rocket science but then it isn't riding a bike, it's somewhere inbetween.

[Al Kufr]

Really, what are your personal goals? Where are you now and where do you want to go? You honestly do need to answer those two questions before getting on to the next step. I literally tell people 50 times per day; investing isn't' rocket science but then it isn't riding a bike, it's somewhere inbetween.

Well, im not in into anything too big, just going to start going to school and I have a minimum wage job right now. Thats perty much it.

I want to save enough money to buy a car, my own house, and just manage money for all that "normal" stuff you do to be independent. Im not in a position to buy any of those things, but i want to be . . . I want a good long term plan "FOR LIFE" to do all those things you need to do when you deal with your money.

[scottkursk]

Well, im not in into anything too big, just going to start going to school and I have a minimum wage job right now. Thats perty much it.

I want to save enough money to buy a car, my own house, and just manage money for all that "normal" stuff you do to be independent. Im not in a position to buy any of those things, but i want to be . . .  I want a good long term plan "FOR LIFE" to do all those things you need to do when you deal with your money.

In that case, The Wealthy Barber is a good place to start. I've heard from people that Rich Dad, Poor Dad series isn't bad but I've actually read them myself. Plus, the Barber is a pretty easy read. Heck, you can pick one up at any local bookstore. Just go by and breeze through and see if it's something you'd like.

And you are about 100 miles ahead of everyone else. Most people don't even think of planning until they've been working for a few years. Just being where you are says to me you've got a good start.

Edited July 23, 2005 by scottkursk

[Al Kufr]

In that case, The Wealthy Barber is a good place to start. I've heard from people that Rich Dad, Poor Dad series isn't bad but I've actually read them myself. Plus, the Barber is a pretty easy read. Heck, you can pick one up at any local bookstore. Just go by and breeze through and see if it's something you'd like.

And you are about 100 miles ahead of everyone else. Most people don't even think of planning until they've been working for a few years. Just being where you are says to me you've got a good start.

Thanks, The Wealthy Barber sounds great. Ill start with that, got any otherrecommendations on personal finance?

The guy who wrote 'Rich Dad, Poor Dad' also has a book called "Becoming a Millionaire God's Way " *cough* *cough* which i guess is some kind of Christian approach, do you know an OBJECTIVE approach to personal finance?I only know of Yaron Brook's CD about an objective approach to investing . . .

Edited July 23, 2005 by Al Kufr

[Spano]

I am somewhat wary of the Rich Dad, Poor Dad series because I listened to a Prodos interview with the author, Robert Kiyosaki, who was at an anti-capitalist thug rally in Australia and spouted all kinds of nonsense about how corporations destroy the world. Even though I haven't read the books myself, I wouldn't know what to expect from someone who accepts such a premise.

One financial planning book I have listened to on CD was The Millionaire Next Door, which wasn't bad and is probably a good buy if you can find it cheap (I paid $43 at a Barnes&Noble, which was way too much). The basic premise of the book is to study the more or less "normal" millionaires, those regular folk who have saved enough over the years to reach a million or two by retirement. The basic thing I retained from the book was that being frugal is important; the book is full of statistics on what percentage of next-door millionaires buy expensive shoes or new verus used cars and so on. It's nothing revolutionary - basically, make and follow an explicit budget and don't waste money on new cars.

As far as investing goes, I have read two books that I would recommend. One was the Warren Buffet Way and the other was One Up on Wall Street by Peter Lynch. The first describes the investing approach of the worlds most successful investor, Warren Buffet, and the second is about Peter Lynch who basically follows Buffet's ideas. Both emphasize long-term, objective valuation of stocks and companies, suggesting that you completely ignore media hype and basically buy based on a company's balance sheet. I find this approach pretty rational, especially compared to others I have seen like the book that taught how to predict the future based on the peaks and valleys of the stock's price chart, as if the price is moved by the geometry of a line on paper. Buffet and Lynch stress that the price is ultimately driven by the company's objective value.

But if you don't have much extra capital to be investing, your money is probably better spent on basic money management books.

[scottkursk]

I am somewhat wary of the Rich Dad, Poor Dad series because I listened to a Prodos interview with the author, Robert Kiyosaki, who was at an anti-capitalist thug rally in Australia and spouted all kinds of nonsense about how corporations destroy the world.  Even though I haven't read the books myself, I wouldn't know what to expect from someone who accepts such a premise.

The Millionaire Next Door...The basic premise of the book is to study the more or less "normal" millionaires, those regular folk who have saved enough over the years to reach a million or two by retirement. The basic thing I retained from the book was that being frugal is important; the book is full of statistics on what percentage of next-door millionaires buy expensive shoes or new verus used cars and so on. It's nothing revolutionary - basically, make and follow an explicit budget and don't waste money on new cars.

As far as investing goes, I have read two books that I would recommend. One was the Warren Buffet Way and the other was One Up on Wall Street by Peter Lynch.

Agree again on One Up on Wall Street by Lynch. When he managed Magellen he was good. He and Buffet share the same investing style and both books address a pretty similar approach to picking and holding stocks.

[Al Kufr]

Thanks for all the help guys, im gona save up money to buy The Millionaire Next Door and The Wealthy Barber.

Any thoughts on books called 'Richest Man in Babylon' by George S. Clason and 'The Millionaire Mind ' by Thomas J. Stanley, which i heard is kinda the same as his other book The Millionaire Next Door.

Edited July 24, 2005 by Al Kufr

[scottkursk]

Thanks for all the help guys, im gona save up money to buy The Millionaire Next Door and The Wealthy Barber.

Any thoughts on books called 'Richest Man in Babylon' by George S. Clason  and 'The Millionaire Mind ' by Thomas J. Stanley, which i heard is kinda the same as his other book The Millionaire Next Door.

I know this may not be a popular suggestion on a capitalist board, however, you could spend some time at your college's library and check the 1st chapters out. They should give you a good indication of the book before you jump all in and buy them. After all, you and/or your parents are paying a good bit I imagine for your tuition so get some use from it before committing your capital.

Talk about being a cheap bast****.

[nimble]

Does anybody know any good books on how to manage your money?

A friend recommended Suze Orman's 'The Money Book for the Young, Fabulous & Broke', does anybody have this book? or can anybody recommend some other good book?

Well, books are nice, but only with a minimum wage job your money should be elsewhere. It isn't hard to manage money if you have reason and common sense. Your first goal should be to get a better paying job and establish credit. Work at a clothing store or some form of retail, those usually pay more than minimum wages (about $7/hour). Or apply at a local hardware store, Home Depot pays $10/hour for starting wages. Then you need to get a student credit card. You don't need any prior credit history to get one, and they are useful. Treat your new credit card as if it were your DEBIT card. Use it to purchase everything you can with it each month, and then pay the balance off in full. This takes discipline but within a year you will have over a 700 credit rating if you do this. From there you will be able to get a car on your own, and schooling shouldn't ever be a big problem. Federal loans are subsidized and are more than leinent on your credit situation, and they can be deferred until after you graduate. So paying for schooling shouldn't be too much of a problem.

Lastly, MAKE A BUDGET. Even if you just roughly figure out your income and your expenses, and determine if you can make ends meet, that is a start. If you don't make enough to pay your bills, you need a better or second job. If you have enough to pay your bills and allow for some spending, you save the rest. If you accumulate enough money, then go and buy some books on investing, but until then take small steps and keep your goals in mind.

Nimble

[nimble]

Oh and as far as using your credit card for everything and paying it off every month, I find it easiest to charge everything, then pay my credit card bill online, with an online check. This makes it so you can easily see your monthly expenses and so that you only have to worry about one bill per month.

[scottkursk]

 

Oh and as far as using your credit card for everything and paying it off every month, I find it easiest to charge everything, then pay my credit card bill online, with an online check. This makes it so you can easily see your monthly expenses and so that you only have to worry about one bill per month. 

 

And use one that pays frequent flyer miles. Seriously. I pay quite literally EVERYTHING with my Continental Visa. When I used to park in a garage, I got bonus miles for parking there from Continental and also got miles by charging them on the Continental Visa. I basically got a free honeymoon. I get miles every time I shop at my grocery store. Plus, I have a subscription to every magazine known to man with all the excess miles.

It works on other so called "affinity" cards, it just depends on what affinity you want it and you have to make sure the affinity you are getting is really worth the extra effort. Oh, and DON'T CARRY A BALANCE. Rich Dad Poor Dad guy ticked me off about that. I personally hate the idea of personal debt, especially credit card debt.

Unless you are talking a house, there isn't a lot of reason for debt. A house is a wonderful little tax right off that one can enjoy oh so much. Short of owning your own small business on the side to write everything off on, a house makes one of your better write offs.

[Toolboxnj]

I've always endorsed the Motley Fool's books (Gardner brothers are the authors), particularly their guide to investing. I read it when I was 12-13 and learned about balance sheets, cash flow, mutual funds, index funds and whatnot. Maybe it's not what you are looking for, but as far as investing goes I think the Motley Fool is top-choice.

[GoodyTooShoes]

Thanks, The Wealthy Barber sounds great. Ill start with that, got any otherrecommendations on personal finance?

The guy who wrote  'Rich Dad, Poor Dad' also has a book called "Becoming a Millionaire God's Way " *cough* *cough* which i guess is some kind of Christian approach, do you know an OBJECTIVE approach to personal finance?I only  know of Yaron Brook's  CD about an objective approach to investing . . .

Honestly I am confused about what several of you have said about "rich dad, poor dad" author Kiyosaki. I don't really know his personal beliefs, however his book does bare a basic principal held by Ayn Rand. In his book he diassagrees with blaming the higher ups (employers, the rich, ext.) for your misfortunes, but instead urges readers to use their own minds to create their own opportunities. That sounds a lot like Rand if you ask me. Even if he is an anti-Rand person his book does hold several resemblances to objectivism teachings.

[Michero]

In line with this topic (I have been reading about mutual funds a lot lately) I realised recently that I want to get into real estate as soon as possible. I am just about to graduate college so obviously I have no money, in fact less than that I owe money, but can anyone suggest good books that I could start with about investing in property?

[softwareNerd]

... can anyone suggest good books that I could start with about investing in property?

I'm curious: why do you want property as part of your investment portfolio?

[Michero]

I'm curious: why do you want property as part of your investment portfolio?

Well I want to buy property because it seems very low risk, and the increase in value of property over time (with the proper care) is quite nice. I've been helping my father (ex-realtor) fix up a house for about the past 5 years and it's value has nearly doubled. Plus, once I own property I can rent it out (i'm thinking maybe a few townhouses eventually) and have steady income with low workload after I retire or before whatever. It just seems smart from what I've seen so far. But like I said, I'm just starting to really investigate this.

[softwareNerd]

I've been helping my father (ex-realtor) fix up a house for about the past 5 years and it's value has nearly doubled.

Pretty cool. I once worked with a senior sales manager who would get great bonuses in some years. Every time he did, he'd buy some property. He ended up with about 10 units by the time he retired.

While you were fixing up the house for 5 years, was it empty? Do you have a rough idea what you ended up spending on it in terms of money -- not as an absolute number, but as a percent of the original cost? Also, do you have a rough idea roughly how many "person hours" were spent on it during those 5 years? It would be interesting to compute the rate of return.

An investment doubling in 5 years would imply about a 15% return per year.

100 --> 115 --> 132 --> 152 --> 175 --> 201

However, if (just as an example) one spent 10% of the original cost on improving it, that's (as rough approximation) 2% per year over 5 years. Also, there may be property taxes and insurance of about 2% per year. These will take approximately 4% off the annual return.

On the other hand, you might be financing it partly with borrowed money. With interest rates so low, that can often be the critical bonus for you.

It would be interesting to compute the rate of return for this specific example and see what it works out to as a %-per-year.

[Michero]

While you were fixing up the house for 5 years, was it empty?

Do you have a rough idea what you ended up spending on it in terms of money -- not as an absolute number, but as a percent of the original cost? Also, do you have a rough idea roughly how many "person hours" were spent on it during those 5 years? It would be interesting to compute the rate of return.

...On the other hand, you might be financing it partly with borrowed money. With interest rates so low, that can often be the critical bonus for you.

I'll see if I can add to the info. First it was not borrowed money, it was cash down (i think is the phrase). For the first 2 months it was empty while we repaired the dining room floor which was cherry wood and had some damage. We painted and wired the house for cable and computer routers. We bought a new rug for the TV room and repaired the fireplace which had very minimal damage. Most of the work has been done on the outside of the house in recent years. We built an amazing tool shed which looks like a mini version of the house (very cute if I may say so) and the landscaping compared with what it was is phenomenal. That's all my dad's doing-- 2 trees removed some sod placed, lots of plants added oh and an in-ground pool added. We built a fence around the pool and a fence along the road (it's a corner property). What's left to do, is the veranda wood needs some replacing and my dad wants to get a new deck. Adding the pool and eventually the deck will probably amount to the most capital put into the property.

As for time, I'd say in the beginning a lot of time was spent. All weekend hours for the first year probably then since that it has been fairly minimal. Almost everything has been done during the summers, and then perhaps 25-30 hours per week more or less. Now my father acquired a townhouse which he'd been fixing up to rent (it is now, finally being rented) so for the last year hardly anytime was spent on the big house.

One note: property taxes are quite bad here something like 5%.

Edited August 4, 2005 by Michero

[~Sophia~]

Don't know if you guys have herd about his new tax-free investment account for Canadian residents. You can contribute up to $5,000 a year (large penalty when you exceed that limit) and any capital gains are completely tax-free throughout your lifetime. As far as I know there are no limits on the type of investments. You can withdraw money at any time and for any reason, with no tax consequences and without affecting your eligibility for federal Income-tested Benefits and Credits. Old Age Security (OAS) benefits, Guaranteed Income Supplement (GIS) or Employment Insurance (EI) benefits will not be reduced as a result of the income earned or the amounts withdrawn from this account. The income earned in the account or the amount withdrawn will also not affect your eligibility for the Canada Child Tax Benefit (CCTB), the Goods and Services Tax Credit (GSTC), the Working Income Tax Benefit (WITB), or the age credit.

[gags]

Don't know if you guys have herd about his new tax-free investment account for Canadian residents.

Do you choose the investments that are bought with the $5,000 or does the government direct where the money goes?

[~Sophia~]

Do you choose the investments that are bought with the $5,000 or does the government direct where the money goes?

You choose the investments.

[gags]

In that case, it sounds like something you should take advantage of for the full $5,000.

And, it makes sense to do it every year until they decide to arbitrarily take away the privilege.

[Greebo]

I rather like:

Dave Ramsey: The Total Money Makeover - Dave Ramsey is deeply opposed to the use of debt. (I see its occasional uses but he has many salient points)

Rabbi Lavin: Thou Shalt Prosper - While based on Talmudic (sp?) law, it has some excellent points on why Jews tend to be more prosperous - including *NOT BEING ASHAMED OF MAKING MONEY* - and some very good info we can use despite its faith based foundation.

... forget author : The Millionaire Next Door and the sequel The Millionaire Mind - the truth about the truly wealthy in today's society - they aren't who you think