personal finance books

My colleague Trent Hamm from The Simple Dollar may have started his blog six months after I did, but he’s ahead of me in books. He published his first, 365 Ways to Live Cheap! [my review], at the end of 2008, and his second, The Simple Dollar, was released this summer.

I’m a huge fan of The Simple Dollar (it’s the only personal-finance blog I read regularly besides my own), and I count Hamm as a colleague and a friend. I think there’s a lot of value in his new book, especially for readers who are financially flustered and ready to change. That said, I think The Simple Dollar (the book) has a serious flaw.

Bad news first

I usually save my complaints about a book until the end of a review. I’m not going to do that here.

My chief beef with The Simple Dollar is that it’s disorganized. For most of the book, there’s no central thesis, and the chapters jump from one topic to another with no discernible pattern. There are chapters on social capital, networking, and relationships, for example, that might make sense when strung together. Instead, they’re peppered throughout the book in what seems like random order.

This makes The Simple Dollar tough to follow. I’m reading about cash flow and frugality, then the book turns to networking and careers, before jumping back to saving and investing, and then hopping forward to money and relationships.

As a reader, it feels like the book is a puzzle that has been mixed up and re-assembled incorrectly. As someone who has written a book of his own (and who has talked to many other writers), it feels very much like somebody — read “the publisher” — came through after Hamm had finished and then arbitrarily changed the order of the chapters. In fact, knowing how methodical Hamm usually is, I’d be willing to bet money this is what happened.

A framework for freedom

Still, while The Simple Dollar as a whole is confusing at times, the chapters themselves are not. Hamm has a talent for cutting to core concepts and discarding the junk. He does that here, too. Where Hamm especially shines — and you know this if you read his blog — is when discussing frugality.

Here, for example, he writes about frugality as a framework for freedom:

Many people associate frugality with sacrifice: You have to give things up. They hear stories about having to give up lattes or giving up eating out or giving up nights on the town, and it sounds incredibly tedious.

A more appropriate view is that frugality is an exchange: You’re trading things you don’t value for things you do value.

Yes! A thousand times yes! It took me years to get this concept, but now that I have it, it guides every financial decision I make. I’ve written 1000-word articles trying to get this point across, but Hamm does it here in just a few sentences.

Hamm says that all of frugality can be boiled down to five simple rules:

• Don’t give up the things you love. Yes, you may have to cut back in the short term, but you don’t have to give up the things that make life worth living. Let’s use my own life as an example. As you know, I like comic books. When I was digging myself out of debt, I had to cut back on my comics spending, but I didn’t give them up completely. Instead, I followed Hamm’s second recommendation, which is…




• Find inexpensive ways to enjoy the things that are important to you. There are almost always cheaper alternatives for pursuing your passions. In my case, that meant borrowing comics from the library. It meant reading the ones I already owned. And it meant buying collections on DVD. (Comics on DVD can’t compare to the printed page, but it’s a cheap way to feed the habit.)




• Cut back hard on the things that matter less. I’ve written extensively about how important this is. In my case, I don’t value television. I rarely watch it. So why was I paying $65/month for a deluxe cable TV package? By cutting back to $15 basic cable, I freed money to pay off my debt or to spend on the things that mattered to me.




• Never go shopping without knowing exactly what you want. “If you ever walk into a store without a plan,” writes Hamm, “it’s highly likely you’re going to walk out the door with something you didn’t intend to buy.” This sort of accidental shopping simply kills frugality and intentional financial goals. Shop with purpose.




• Use the 30-day rule for any unplanned purchase. If you do find yourself tempted to buy on impulse, do what you can to defer the spending. Instead of buying today, put it off until next week — or next month. If you still want whatever is tempting you to spend, then consider the purchase — if you can afford it.

Each chapter of The Simple Dollar contains great advice like this, and Hamm concludes each chapter with five steps to help you change your life for the better.

Well, Book Week has come to a close at Get Rich Slowly, and while it was an interesting experiment, it’s not likely to happen again any time soon.

For one thing, I learned that doing book reviews takes more work than doing regular posts. To do a review, you have to read the book (sometimes twice), decide how it’s relevant to readers, and then write a normal article. And while an occasional book review is a nice change of pace, a week filled with them is boring, both for me and for the readers. So, no more Book Weeks at GRS.

Before we ease back into normal personal-finance topics, though, I thought it would be fun to discuss our favorite personal-finance books and magazines. As a starting point, here’s a recent comment from Deb:

I’d love a running list of your top 10 fave finance books. You could keep it fluid; there’s no reason it can’t change. I’m always on the hunt for helpful financial books! I’m most confused about self-directed investing vs. having a financial advisor. I tried to wrap my mind around Bernstein’s books and just couldn’t do it, which makes me concerned about trying to do investing on my own!

Deb’s comment is interesting for a couple of reasons.

• First, I like the idea of a “running list” of favorite finance books. Because she’s right: The list changes with time. As I read more, and as my own finance skills develop, different books will appeal to me.




• Second, she points out that what might be a good book for one person may not be good for another. I find William Bernstein’s books perfect for my personal knowledge and philosophy. I’m sure my wife would find them tedious. We each have different tastes and needs.

So, to end Book Week, I’ve drafted a list of my current top-ten finance books. These are the books I would want in a personal finance library if I started one today. Your list would be different (and I invite you to share it in the comments).

Here’s the list (in alphabetical order by title):

• All Your Worth. You know, I hated this book at first. And I’m still not a fan of how Elizabeth Warren allows personal responsibility off the hook. But I can’t deny that this book had a huge impact on helping me find a balanced financial life. The Balanced Money Formula has been a Big Deal for me, and that’s an idea that originated here. [My review.]




• The Complete Tightwad Gazette. This book is a monster — almost 1000 pages of ideas on how to live well for less. Amy Dacyczyn was the Queen of Cheap twenty years ago, and her legacy remains strong. If you want to know how to get the best deal on groceries, how to shop for clothes, and how to reuse anything, then pick up this book. It’s a treasure trove of ideas. [I have never reviewed this book, though I've mentioned it many times.]




• Debt is Slavery. Not many people have heard of this slim self-published book. That’s too bad. Michael Mihalik does a fantastic job of explaining a handful of basic financial concepts, and his advice is sound. This is the perfect book for a young adult who doesn’t know where to start. I wish I’d had access to this book when I was 20. [My review.]




• The Four Pillars of Investing. If I ever finish Jeremy Siegel’s Stocks for the Long Run, it may replace this book on my list. For now, though, The Four Pillars of Investing is my go-to book for reminding myself why I’ve adopted index funds as my main investment strategy. This book covers investment theory, history, and psychology, as well as the business of investing. [My review.]




• The Incredible Secret Money Machine. I know, I know: You’ve never heard of it. It may be long out of print, but The Incredible Secret Money Machine is a terrific book about building “money machines”, businesses or products that keep producing nickels year after year. I wish the author had the gumption to update this (it’s over 30 years old!) and reprint it for a new generation. [My review.]




• Work Less, Live More. Bob Clyatt’s book on early- and semi-retirement is one of my favorites. It’s sensible, comprehensive, and inspirational. He includes a big section on smart investing, and offers ideas for how to pursue your passions once you’ve stopped working full-time. [I've never reviewed this book, though I should.]




• You Can Negotiate Anything. It was a toss-up whether to include this or Negotiating Your Salary [my review]. The latter is outstanding, and I recommend it highly to anyone who is applying for a job or asking for a raise. In the end, though, I chose Herb Cohen’s book because it covers a wider range of topics. And it’s entertaining! [My review.]




• Your Money and Your Brain. I haven’t reviewed this at Get Rich Slowly yet, but it’s a great book. Jason Zweig covers the latest research into how money affects our behavior. There are a lot of interesting books out there about the psychology of personal finance, but this is the most comprehensive.




• Your Money or Your Life. Of course this is on my list. Your Money or Your Life has influenced thousands of people — including me. The book includes advice about getting out of debt, living frugally, and seeking financial independence. But what most of us remember is that it helped make money less abstract, helped us see how it was directly related to time. [A guest review from the first month of GRS back in 2006.]




• Your Money: The Missing Manual. Wait — I put my own book on the list? You bet. I wrote Your Money: The Missing Manual precisely to be the sort of book I needed when I was struggling with money. I think it’s a great resource, getting to the heart of a broad range of topics. Plus, I’ve done my best to point to other books and websites readers can use to get more information. If I could only have ten books in my personal-finance library, I’d want this to be one of them. (In fact, I refer to my own book almost daily. No joke. I guess that’s one of the luxuries of writing a book — you can just write the book you want!)

Are there other great books about money out there? Of course. A list of ten books can’t begin to be comprehensive. Over the past five years, I’ve read nearly 200 money manuals, and many of them contained great information. But today — on 10 September 2010 — these are the ten essential books I’d want in my personal finance library — if I could have only ten.

What are your essential personal-finance books? Which have you read and loved? Which have you read and hated? Are there books you’d recommend to people in specific circumstances?

Various <b>News</b> Tidbits - Lookout Landing

Various News Tidbits. ... Various News Tidbits. Tiny by Matthew on Oct 1, 2010 4:25 PM PDT in Miscellaneous � Tweet. 3 comments; Story-email Email; Printer Print. Even Felix's hugs are powerful � More photos » Elaine Thompson - AP ...

Pulse <b>News</b> Reader for iPad 2.0: More sources, better organization

Alphonso Labs reported today that their Pulse News Reader for iPad (currently US $1.99) has been updated to version 2.0. The new version of the app addresses one of the major complaints about the original by allowing up to 60 news feeds ...

<b>News</b> Corp. Donates $1 Million to U.S. Chamber of Commerce <b>...</b>

The donation is the News Corporation's second known contribution to a group that is advertising heavily to support Republicans this year.

bench craft company rip off
bench craft company rip off

Various <b>News</b> Tidbits - Lookout Landing

Various News Tidbits. ... Various News Tidbits. Tiny by Matthew on Oct 1, 2010 4:25 PM PDT in Miscellaneous � Tweet. 3 comments; Story-email Email; Printer Print. Even Felix's hugs are powerful � More photos » Elaine Thompson - AP ...

Pulse <b>News</b> Reader for iPad 2.0: More sources, better organization

Alphonso Labs reported today that their Pulse News Reader for iPad (currently US $1.99) has been updated to version 2.0. The new version of the app addresses one of the major complaints about the original by allowing up to 60 news feeds ...

<b>News</b> Corp. Donates $1 Million to U.S. Chamber of Commerce <b>...</b>

The donation is the News Corporation's second known contribution to a group that is advertising heavily to support Republicans this year.

bench craft company rip off bench craft company rip off

My colleague Trent Hamm from The Simple Dollar may have started his blog six months after I did, but he’s ahead of me in books. He published his first, 365 Ways to Live Cheap! [my review], at the end of 2008, and his second, The Simple Dollar, was released this summer.

I’m a huge fan of The Simple Dollar (it’s the only personal-finance blog I read regularly besides my own), and I count Hamm as a colleague and a friend. I think there’s a lot of value in his new book, especially for readers who are financially flustered and ready to change. That said, I think The Simple Dollar (the book) has a serious flaw.

Bad news first

I usually save my complaints about a book until the end of a review. I’m not going to do that here.

My chief beef with The Simple Dollar is that it’s disorganized. For most of the book, there’s no central thesis, and the chapters jump from one topic to another with no discernible pattern. There are chapters on social capital, networking, and relationships, for example, that might make sense when strung together. Instead, they’re peppered throughout the book in what seems like random order.

This makes The Simple Dollar tough to follow. I’m reading about cash flow and frugality, then the book turns to networking and careers, before jumping back to saving and investing, and then hopping forward to money and relationships.

As a reader, it feels like the book is a puzzle that has been mixed up and re-assembled incorrectly. As someone who has written a book of his own (and who has talked to many other writers), it feels very much like somebody — read “the publisher” — came through after Hamm had finished and then arbitrarily changed the order of the chapters. In fact, knowing how methodical Hamm usually is, I’d be willing to bet money this is what happened.

A framework for freedom

Still, while The Simple Dollar as a whole is confusing at times, the chapters themselves are not. Hamm has a talent for cutting to core concepts and discarding the junk. He does that here, too. Where Hamm especially shines — and you know this if you read his blog — is when discussing frugality.

Here, for example, he writes about frugality as a framework for freedom:

Many people associate frugality with sacrifice: You have to give things up. They hear stories about having to give up lattes or giving up eating out or giving up nights on the town, and it sounds incredibly tedious.

A more appropriate view is that frugality is an exchange: You’re trading things you don’t value for things you do value.

Yes! A thousand times yes! It took me years to get this concept, but now that I have it, it guides every financial decision I make. I’ve written 1000-word articles trying to get this point across, but Hamm does it here in just a few sentences.

Hamm says that all of frugality can be boiled down to five simple rules:

• Don’t give up the things you love. Yes, you may have to cut back in the short term, but you don’t have to give up the things that make life worth living. Let’s use my own life as an example. As you know, I like comic books. When I was digging myself out of debt, I had to cut back on my comics spending, but I didn’t give them up completely. Instead, I followed Hamm’s second recommendation, which is…




• Find inexpensive ways to enjoy the things that are important to you. There are almost always cheaper alternatives for pursuing your passions. In my case, that meant borrowing comics from the library. It meant reading the ones I already owned. And it meant buying collections on DVD. (Comics on DVD can’t compare to the printed page, but it’s a cheap way to feed the habit.)




• Cut back hard on the things that matter less. I’ve written extensively about how important this is. In my case, I don’t value television. I rarely watch it. So why was I paying $65/month for a deluxe cable TV package? By cutting back to $15 basic cable, I freed money to pay off my debt or to spend on the things that mattered to me.




• Never go shopping without knowing exactly what you want. “If you ever walk into a store without a plan,” writes Hamm, “it’s highly likely you’re going to walk out the door with something you didn’t intend to buy.” This sort of accidental shopping simply kills frugality and intentional financial goals. Shop with purpose.




• Use the 30-day rule for any unplanned purchase. If you do find yourself tempted to buy on impulse, do what you can to defer the spending. Instead of buying today, put it off until next week — or next month. If you still want whatever is tempting you to spend, then consider the purchase — if you can afford it.

Each chapter of The Simple Dollar contains great advice like this, and Hamm concludes each chapter with five steps to help you change your life for the better.

Well, Book Week has come to a close at Get Rich Slowly, and while it was an interesting experiment, it’s not likely to happen again any time soon.

For one thing, I learned that doing book reviews takes more work than doing regular posts. To do a review, you have to read the book (sometimes twice), decide how it’s relevant to readers, and then write a normal article. And while an occasional book review is a nice change of pace, a week filled with them is boring, both for me and for the readers. So, no more Book Weeks at GRS.

Before we ease back into normal personal-finance topics, though, I thought it would be fun to discuss our favorite personal-finance books and magazines. As a starting point, here’s a recent comment from Deb:

I’d love a running list of your top 10 fave finance books. You could keep it fluid; there’s no reason it can’t change. I’m always on the hunt for helpful financial books! I’m most confused about self-directed investing vs. having a financial advisor. I tried to wrap my mind around Bernstein’s books and just couldn’t do it, which makes me concerned about trying to do investing on my own!

Deb’s comment is interesting for a couple of reasons.

• First, I like the idea of a “running list” of favorite finance books. Because she’s right: The list changes with time. As I read more, and as my own finance skills develop, different books will appeal to me.




• Second, she points out that what might be a good book for one person may not be good for another. I find William Bernstein’s books perfect for my personal knowledge and philosophy. I’m sure my wife would find them tedious. We each have different tastes and needs.

So, to end Book Week, I’ve drafted a list of my current top-ten finance books. These are the books I would want in a personal finance library if I started one today. Your list would be different (and I invite you to share it in the comments).

Here’s the list (in alphabetical order by title):

• All Your Worth. You know, I hated this book at first. And I’m still not a fan of how Elizabeth Warren allows personal responsibility off the hook. But I can’t deny that this book had a huge impact on helping me find a balanced financial life. The Balanced Money Formula has been a Big Deal for me, and that’s an idea that originated here. [My review.]




• The Complete Tightwad Gazette. This book is a monster — almost 1000 pages of ideas on how to live well for less. Amy Dacyczyn was the Queen of Cheap twenty years ago, and her legacy remains strong. If you want to know how to get the best deal on groceries, how to shop for clothes, and how to reuse anything, then pick up this book. It’s a treasure trove of ideas. [I have never reviewed this book, though I've mentioned it many times.]




• Debt is Slavery. Not many people have heard of this slim self-published book. That’s too bad. Michael Mihalik does a fantastic job of explaining a handful of basic financial concepts, and his advice is sound. This is the perfect book for a young adult who doesn’t know where to start. I wish I’d had access to this book when I was 20. [My review.]




• The Four Pillars of Investing. If I ever finish Jeremy Siegel’s Stocks for the Long Run, it may replace this book on my list. For now, though, The Four Pillars of Investing is my go-to book for reminding myself why I’ve adopted index funds as my main investment strategy. This book covers investment theory, history, and psychology, as well as the business of investing. [My review.]




• The Incredible Secret Money Machine. I know, I know: You’ve never heard of it. It may be long out of print, but The Incredible Secret Money Machine is a terrific book about building “money machines”, businesses or products that keep producing nickels year after year. I wish the author had the gumption to update this (it’s over 30 years old!) and reprint it for a new generation. [My review.]




• Work Less, Live More. Bob Clyatt’s book on early- and semi-retirement is one of my favorites. It’s sensible, comprehensive, and inspirational. He includes a big section on smart investing, and offers ideas for how to pursue your passions once you’ve stopped working full-time. [I've never reviewed this book, though I should.]




• You Can Negotiate Anything. It was a toss-up whether to include this or Negotiating Your Salary [my review]. The latter is outstanding, and I recommend it highly to anyone who is applying for a job or asking for a raise. In the end, though, I chose Herb Cohen’s book because it covers a wider range of topics. And it’s entertaining! [My review.]




• Your Money and Your Brain. I haven’t reviewed this at Get Rich Slowly yet, but it’s a great book. Jason Zweig covers the latest research into how money affects our behavior. There are a lot of interesting books out there about the psychology of personal finance, but this is the most comprehensive.




• Your Money or Your Life. Of course this is on my list. Your Money or Your Life has influenced thousands of people — including me. The book includes advice about getting out of debt, living frugally, and seeking financial independence. But what most of us remember is that it helped make money less abstract, helped us see how it was directly related to time. [A guest review from the first month of GRS back in 2006.]




• Your Money: The Missing Manual. Wait — I put my own book on the list? You bet. I wrote Your Money: The Missing Manual precisely to be the sort of book I needed when I was struggling with money. I think it’s a great resource, getting to the heart of a broad range of topics. Plus, I’ve done my best to point to other books and websites readers can use to get more information. If I could only have ten books in my personal-finance library, I’d want this to be one of them. (In fact, I refer to my own book almost daily. No joke. I guess that’s one of the luxuries of writing a book — you can just write the book you want!)

Are there other great books about money out there? Of course. A list of ten books can’t begin to be comprehensive. Over the past five years, I’ve read nearly 200 money manuals, and many of them contained great information. But today — on 10 September 2010 — these are the ten essential books I’d want in my personal finance library — if I could have only ten.

What are your essential personal-finance books? Which have you read and loved? Which have you read and hated? Are there books you’d recommend to people in specific circumstances?

bench craft company rip off

Various <b>News</b> Tidbits - Lookout Landing

Various News Tidbits. ... Various News Tidbits. Tiny by Matthew on Oct 1, 2010 4:25 PM PDT in Miscellaneous � Tweet. 3 comments; Story-email Email; Printer Print. Even Felix's hugs are powerful � More photos » Elaine Thompson - AP ...

Pulse <b>News</b> Reader for iPad 2.0: More sources, better organization

Alphonso Labs reported today that their Pulse News Reader for iPad (currently US $1.99) has been updated to version 2.0. The new version of the app addresses one of the major complaints about the original by allowing up to 60 news feeds ...

<b>News</b> Corp. Donates $1 Million to U.S. Chamber of Commerce <b>...</b>

The donation is the News Corporation's second known contribution to a group that is advertising heavily to support Republicans this year.

bench craft company rip off bench craft company rip off

Various <b>News</b> Tidbits - Lookout Landing

Various News Tidbits. ... Various News Tidbits. Tiny by Matthew on Oct 1, 2010 4:25 PM PDT in Miscellaneous � Tweet. 3 comments; Story-email Email; Printer Print. Even Felix's hugs are powerful � More photos » Elaine Thompson - AP ...

Pulse <b>News</b> Reader for iPad 2.0: More sources, better organization

Alphonso Labs reported today that their Pulse News Reader for iPad (currently US $1.99) has been updated to version 2.0. The new version of the app addresses one of the major complaints about the original by allowing up to 60 news feeds ...

<b>News</b> Corp. Donates $1 Million to U.S. Chamber of Commerce <b>...</b>

The donation is the News Corporation's second known contribution to a group that is advertising heavily to support Republicans this year.

bench craft company rip off bench craft company rip off

Various <b>News</b> Tidbits - Lookout Landing

Various News Tidbits. ... Various News Tidbits. Tiny by Matthew on Oct 1, 2010 4:25 PM PDT in Miscellaneous � Tweet. 3 comments; Story-email Email; Printer Print. Even Felix's hugs are powerful � More photos » Elaine Thompson - AP ...

Pulse <b>News</b> Reader for iPad 2.0: More sources, better organization

Alphonso Labs reported today that their Pulse News Reader for iPad (currently US $1.99) has been updated to version 2.0. The new version of the app addresses one of the major complaints about the original by allowing up to 60 news feeds ...

<b>News</b> Corp. Donates $1 Million to U.S. Chamber of Commerce <b>...</b>

The donation is the News Corporation's second known contribution to a group that is advertising heavily to support Republicans this year.

bench craft company rip off bench craft company rip off