A couple weeks ago I Iisted books that I think make great gifts for your loved ones this holiday season. I asked readers to suggest the books they would add to my list. Here's what they came up with -- along with their thoughts and some notes from Amazon on each book:
- I have given Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: Revised and Updated for the 21st Century
to many people. It seems to be able to reach out to a broader range of people.
Amazon summary: In an age of great economic uncertainty when everyone is concerned about money and how they spend what they have, this new edition of the bestselling Your Money or Your Life is an essential read. With updated resources, an easy-to-use index, and anecdotes and examples particularly relevant today-it tells you how to: get out of debt and develop savings, reorder material priorities and live well for less, resolve inner conflicts between values and lifestyle, save the planet while saving money, and much more. In Your Money or Your Life, Vicki Robin shows readers how to gain control of their money and finally begin to make a life, rather than just make a living.
- The Four Pillars of Investing: Lessons for Building a Winning Portfolio
by William J. Bernstein. It provides realistic and useful advice for how to invest and save.
Amazon summary: William Bernstein's The Four Pillars of Investing gives investors the tools they need to construct top-returning portfolioswithout the help of a financial adviser. In a relaxed, nonthreatening style, Dr. Bernstein provides a distinctive blend of market history, investing theory, and behavioral finance, one designed to help every investor become more self-sufficient and make betterinformed investment decisions. The 4 Pillars of Investing explains how any investor can build a solid foundation for investing by focusing on four essential lessons, each building upon the other. Containing all of the tools needed to achieve investing success, without the help of a financial advisor, it presents: Practical investing advice based on fascinating history lessons from the market, exercises to determine risk tolerance as an investor, and an easy-to-understand explanation of risk and reward in the capital markets.
- Good list. I'd add Automatic Wealth: The Six Steps to Financial Independence
by Michael Masterson. His advice on "multiple sources of income" proved life changing for me.
Amazon summary: The advice and concepts outlined in Automatic Wealth are best suited for those in their 30s-50s who recognize that their current job will never afford them true financial independence. Rather than encourage readers to quit their day jobs today and launch into a new scheme tomorrow, Masterson shows how to turn your skills and experience into significantly more money within seven to fifteen years. For those just getting by, he details how to get the biggest pay raises now and how to move into more lucrative ventures in the near future. For those with some savings, he offers specific advice on building equity and increasing net worth significantly and quickly. Since Masterson made his millions starting and developing small businesses, he encourages people to become entrepreneurs themselves and discusses which kinds of ventures to invest in and which ones to avoid. He also stresses the importance of developing multiple income streams, offering chapters on real estate, stocks and bonds, consulting, direct mail, and other opportunities.
- I Will Teach You To Be Rich
by Ramit Sethi. I believe this book should be read by every freshman in high school. (Different comment) I'll second I Will Teach You To Be Rich
Amazon summary: At last, for a generation that's materially ambitious yet financially clueless comes I Will Teach You To Be Rich, Ramit Sethi's 6-week personal finance program for 20-to-35-year-olds. A completely practical approach delivered with a nonjudgmental style that makes readers want to do what Sethi says, it is based around the four pillars of personal finance— banking, saving, budgeting, and investing—and the wealth-building ideas of personal entrepreneurship.
- The Total Money Makeover: A Proven Plan for Financial Fitness
by Dave Ramsey.
Amazon summary: The success stories speak for themselves in this book from money maestro Dave Ramsey. Instead of promising the normal dose of quick fixes, Ramsey offers a bold, no-nonsense approach to money matters, providing not only the how-to but also a grounded and uplifting hope for getting out of debt and achieving total financial health. Ramsey debunks the many myths of money (exposing the dangers of cash advance, rent-to-own, debt consolidation) and attacks the illusions and downright deceptions of the American dream, which encourages nothing but overspending and massive amounts of debt. "Don't even consider keeping up with the Joneses," Ramsey declares in his typically candid style. "They're broke!" The Total Money Makeover isn't theory. It works every single time. It works because it is simple. It works because it gets to the heart of the money problems: you.
- I gave the book The Elements of Investing
by Charles Ellis and Burton Malkiel to my wife's cousin, who is a student in high school, earlier this year for her birthday. This book is geared towards the beginning investor and emphasizes saving and building wealth through passive investing. Because she is a high school student, I understand she may not heed the recommendations in the book at this time in her life. But I think there is great value in exposing young people to new ideas.
Amazon summary: A timeless, easy-to-read guide on life-long investment principles that can help any investor succeed. The Elements of Investing has a single-minded goal: to teach the principles of investing in the same pared-to-bone manner that Professor William Strunk Jr. once taught composition to students at Harvard, using his classic little book, The Elements of Style. With great daring, Ellis and Malkiel imagined their own Little Red Schoolhouse course in investing for every investor around the world-and then penned this book. The Elements of Investing hacks away at all the overtrading and over thinking so predominant in the hyperactive thought patterns of the average investor. Malkiel and Ellis offer investors a set of simple but powerful thoughts on how to challenge Mr. Market at his own game, and win by not losing. All the need-to-know rules and investment principles can be found here.
Any of these look good to you?
I have recommended Malkiel & Ellis, and Bernstein also to many people. I hope to read Sethi during the holidays.
I would also recommend watching
http://www.youtube.com/watch?v=Y0LSG2omvEg
the Google authors youtube presentation by Dan Solin.
Those financially pressed can send the link as a gift - it could be the best gift many people get.
Posted by: DIY Investor | November 29, 2010 at 07:57 AM
I read Dave Ramsey's first book "Financial Peace" in the mid-90s which helped teach me self discipline and budgeting skills. After this I craved more. When you've got your debt and cash flow under control the next step would be how to increase your income. I read several books but found Michael Masterson's Automatic Wealth the best.
His premise is creating "multiple sources of income". The idea here is to accept your day job and income but increase your wealth through other vehicles - rental property and business ownership. After reading his book in 2006 I bought a few modest homes for rental.
In addition I expanded my moonlighting business which now exceeds my day job in net income. Masterson does a good job providing the numbers on rental property as well as how to succeed in business. He doesn't provide ideas on what kind of businesses with the exception of copywriting. He evidently made a lot of money on this but I didn't find value in these chapters.
The bottom line is that the best way to increase your wealth (after cutting expenses and operating within a budget) is through multiple income streams. 10 years ago my household had only one, my job. We now have 5 which includes rental properties, a business and the income from my spouse and I.
Note that rental properties are a break even on cash flow. The benefit with those are twofold - tax deductions (through depreciation and other expenses) and having someone else pay your asset off.
Posted by: texashaze | November 29, 2010 at 01:11 PM