Financial Books?

[LuxLiving]

Re: Financial Books?

Ohhhh goody books!!

Like me, you also might love:

The Richest Man In Babylon by Clason - give it as a gift all the time -(bought frugally at used book stores) Reread this one approximately every 6 months or so. MEMORIZE the rules!! Anyone gripes to me about their finances I hand them this book.

Eat Healthy for $50 a Week - Rhonda Barfield - Was already doing many of these things but it's handy for a reference when needing a refresher!

Wealthy Barber - this one is really good for people like me who want to do 'Anticipatory Budgeting'. That means squirreling away now for future needs. He explains the WHY you need to better than most. Not just that you need to but WHYFORBECAUSE.

This one is out of date and somewhat discredited at some point I believe, but still very useful and that is: The Beardstown Ladies first book - whatever that title was. It helped me get started investing. They made me believe that if these little ol' ladies could understand and successfully invest, then so could I. Joined my investment club because of this book. Got involved w/DRIPS and NAIC. --good stuff. (Seems they miscalcuted their returns or something.)

Your Money Or Your Life by Dominquez. Ditto what everyone else said. It helped me decide at a time I was conflicted that staying home w/my kids was right for me At That Point In Time. Got me logging my expenses. And drawing smiley faces on those days I didn't spend! Quantifying objectively the 'goody' I felt when spending. GOOD!
GOOD!

Title something like -- Simplify Your Life by Elaine. St. James. Not only about money, but simplicity in needs vs. wants. I found it very clarifying. Simple things really, and maybe not explicit in the book but goofy things I was doing like buying food that made me fat while spending gazillions of dollars on diet books, diet pills, etc. -Got off that MerryGoRound. Now me just fluffy! But it's the happy dollars in my pocket that make me look that way - no, REALLY!! Yes, Grandmother what a big roll of cash at my waistline! signed BootaliciousBoHineyBudgeter

The Truth About Money - by Ric Edelman. NOT JUST A REHASH!! Many of his ideas were new concepts to me.

Debt Reduction Strategies - by John Avanzini. Goodbye Mortgage!!

Cashing in on the American Dream: How to Retire at 35 by Terhorst, Paul.

Anything by Mary Hunt and Ron Blue.

Now for fun - you might enjoy many of the fictionalized Paul E. Erdman's books...

Zero Coupon
The Silver Bears
The Swiss Account
Last Days of America
The Palace {Greedy4chips I think this one's for you!
The Panic of '89
The Crash of '79
The Billion Dollar Sure Thing / also printed under title of The Billion Dollar Killing
The Set-Up

- most of his books are fiction but he teaches us stuff about banking/finance/investing at the same time we are enjoying a rich storyline. I read once for pleasure and a second time w/highlighter & notebook.

For all these books look for them at the library first for free - then if you really like them buy them at used bookstore or on half.com or ebay.

-LuxLivingFrugalis

[Mathew Green]

Re: Financial Books?

This one is out of date and somewhat discredited at some point I believe, but still very useful and that is: The Beardstown Ladies first book - whatever that title was. It helped me get started investing. They made me believe that if these little ol' ladies could understand and successfully invest, then so could I. Joined my investment club because of this book. Got involved w/DRIPS and NAIC. --good stuff. (Seems they miscalcuted their returns or something.)

Quoting From an article on Fool.com that chastises the media for giving the Beardstown Ladies such a hard time:

In early March, Shane Tristch -- the managing editor at Chicago Magazine -- published an article raising doubts about the stated performance of the Beardstown Ladies Investment Club. It turns out that he was right to be skeptical. After Tritsch's article hit the stands, the Ladies agreed to submit their portfolio to a public audit by Big Six accountant, Price Waterhouse. The firm's review yielded unhappy results for the club. Their investment returns from 1984-1993 rang up a disappointing 9.1% per year versus the 14.9% annual return from the S&P 500 index over the same period.

Even worse, that 9.1% yearly growth fell dramatically short of the 23.4% annualized returns that the club had promoted. It turns out that that 23.4% growth was a statement of returns for their 1991-1992 performance, not for the full decade. Their publisher, having splattered the spectacular performance numbers of the club all over their marketing material, punched out the sale of 800,000 copies of the Beardstown Ladies' Common Sense Investment Guide. All of this when it turns out that for a decade, they'd been roundly thumped by the market and hadn't championed the availability of the index fund.

While that whole scandal seems to be the result of an honest mistake and an over-zealous publisher, it's important to remember that the Ladies actually underperformed the S&P500 from 1984-1993, which makes their investment advice look pretty worthless.

In the old days, when you needed $100,000 to open a brokerage account and had to buy 100+ shares at a time, investment clubs made sense for people with limited money, but now investment clubs make a lot less sense because anyone with $1000 can open an online brokerage account and buy 40 shares of a $25 stock, then add another $1000 two to six times a year till they own 15-20 stocks. While that doesn't give you the immediate diversification of an investment club, it does give you a lot more control of your own money.

People who join an investment club are also likely to re-enforce each others bad habits and feed on each others hysteria. The NAIC Stock Selection Guide and other advice from them helps to counteract this tendency, but I still think an individual is better off acting as an individual, unless he can locate a club in which each member is truly an expert in a different portion of the market.

However, that's just my humble opinion. There's a lot to be said for having live bodies you can discuss investing with on a regular basis, and for many people an investment club is a worthwhile investment. (pun intended )

[Mathew Green]

Re: Financial Books?

Hey there

The new Suze Orman book, Young Fabulous and Broke worries me a little. Now I haven't read it, but I saw her speak on PBS on the topic in it. She is now saying that there is "good credit card debt" and "Bad credit card debt". She said that for the first few years you can live on debt (credit card and otherwise) to support your life as you work like a dog for a company that you want to make an impression in. Then you will work up the company and get paid more and pay it off. To me that sounded risky. Now having said that I haven't read the book and watched about 3/4's of her talk on tv.

I haven't read the book either, but I did watch the whole TV show, and what really chapped my hide was her advice to get a job in a field you love, work like a dog, and never ask for a raise or a promotion because the company will give you those things automatically and will value your unselfish dedication. What kind of fantasy world is she living in??? The only thing you'll get by following that advice is more work and more responsibility piled on top of you with no extra money and no recognition of how valuable you are.

True conversation: Boss said, "You're slacking off too much, I need all this done right now." I said, "I've had about enough of this. You know I do 2-3 times as much work as anyone else in here, but you never fuss at them about slacking off." Boss replied, "That's because I know it wouldn't do any good to fuss at them. You're the only person here I can count on to get things done!" {I wish I were making that up, but I swear I'm not. I worked there another three years before walking out in the middle of a shift.}

[meaghanchan]

Re: Financial Books?

I just finished reading "The Bogleheads Guide to Investing", and it is great. A very solid introduction to investing that covers the basics very well, but actually goes into a lot of detail in many different areas. I very much reccommend it to anyone who wants to get started investing, or anyone who is investing and wants to learn more.

[LuxLiving]

Re: Financial Books?

People who join an investment club are also likely to re-enforce each others bad habits and feed on each others hysteria. The NAIC Stock Selection Guide and other advice from them helps to counteract this tendency, but I still think an individual is better off acting as an individual, unless he can locate a club in which each member is truly an expert in a different portion of the market.
However, that's just my humble opinion. There's a lot to be said for having live bodies you can discuss investing with on a regular basis, and for many people an investment club is a worthwhile investment. (pun intended )

I was going to say Mathew Green - then if we reenforce each other's bad habits then perhaps we'd better stay away from places ohhhh, I dunno, such as this one????? Nahh!

I went into my investment club TO LEARN and so did the others I joined with - we learn together. Always profitable? No. But we learn.

The Beardstown ladies books were much more than just their portfolios' results. It was alot of encouragement that ANYONE who is willing can learn about a subject that pretty much up until that time was off-limits to the average Josephine on the streets. Those women and their stories were EMPOWERING EXAMPLES to many people who would otherwise have been intimidated out of the market.

[Mathew Green]

Re: Financial Books?

I was going to say Mathew Green - then if we reenforce each other's bad habits then perhaps we'd better stay away from places ohhhh, I dunno, such as this one????? Nahh!

I said they are "likely" to reinforce each others bad habits and feed on each others hysteria. I stand by that. Following the crowd near a market top or a market bottom is always a mistake, and the groupthink of investment clubs lends itself to that. Thus the need for objective tools like the Stock Selection Guide to counter-balance the peer presure effect.

After all, if individual investors hate to admit buying a certain stock was a mistake, I can only imagine how much harder it is to stand up in front a group and say "We should not have bought this stock," let alone "I should not have reccomended this stock." If, as you say, everyone in your investment club is 'learning' then there are probably a lot of bad habits in the group as a result of those habits/beliefs/feelings being common among inexperienced investors, but using objective stock selection criteria reduces the 'inexperience' factor.

And what's true in investment clubs is true in internet forums too: Whatever the prevailing groupthink is, anyone who expresses even a little doubt in it does so at his own risk. When everyone thinks alike, no one thinks very much; and the nature of any group is to marginalize or isolate any member who doesn't agree with the majority.

For example, mutual funds and mindless dollar-cost-averaging are a mainstay in the investment philosophy of many people in this forum, yet I shun both, and always have, for reasons I consider very sound. If they and I belonged to the same investing club, would there be any chance of my viewpoint influencing the buying decisions? I doubt it! Instead I would quickly be booted out, or would leave voluntarily to seek a group with the same wise/foolish viewpoint I already hold. That is why members of investment clubs (or internet forums) have to guard against their natural tendency to reinforce each others bad habits.

The Beardstown ladies books were much more than just their portfolios' results.

I have nothing against the Ladies, other than their overhyped results. I was just clarifying why their books are now viewed with a certain degree of suspicion, because you seemed rather vague about it.

While I think inspiration and encouragement are both good things, if the specific financial advice doesn't beat the market averages, then you're wasting your time reading it. I haven't read much of the Ladies prose because their style is so clearly not my style and not a style I'm interested in learning. YMMV.