Last week, Nickel polled a few personal finance bloggers for their favorite personal finance books and reached a nice set of eleven great books. My personal favorite was The Richest Man in Babylon because: “This book does what no other personal finance book does. It keeps the generally simple tenets of personal finance very simple. Too often books try to be very complicated so they sell more copies, but The Richest Man uses very easy to understand allegories that won’t trip anyone up.”

So, of course, after a post about 11 Great Books About Money, you must be wondering about what the 11 Terrible Books About Money are right!? Well, I polled the same set of bloggers and found that it was much harder to remember the terrible books because we often just put them out of our minds. In fact, several of them weren’t even able to come up with one (perhaps they just wanted to be positive!) But, a few of them did share their opinions and so we have four. That’s right, only four… but one book was hated by four bloggers, so we have representation from eight bloggers (including myself).

Rich Dad, Poor Dad by Robert Kiyosaki was declared terrible by four bloggers. The comments ranged from “not actionable” (that is, the advice might be good but how exactly do I use it?) to “insulting.”

• NCN: “While I was intrigued by the idea of the book, I found the advice to be hollow, somewhat cold, and non-specific.”
• Trent: “It was arguably inspirational, but it was factually incorrect (or at least not directly actionable) and it did a lot to encourage an actively antisocial mindset and a ridiculous disdain for people who don’t have an entrepreneurial spark. Kiyosaki goes so far as to call people who work for a salary “hamsters,” which goes beyond ridiculous to disturbing.”
• Leo: “It was a nice story, but it’s one thing to give advice and another to actually put it into action. Unlike some of my favorite personal finance books, RDPD doesn’t give enough concrete advice about investing or running your own business. It says that these are good things, but we already knew that. Now how do we implement them? It was a disappointment to me, as I was looking for more.”
• Jeremy: “If you want a an inspirational book that puts ideas into your head, yet gives ideas that are simply unrealistic for you to accomplish, this is the book for you. For the average person, you simply can’t put many of the ideas in this book to use. Not everyone can jump into real estate or start their own business. While these ideas can be great ways to free yourself from being an employee just trying to earn a paycheck, most people should be focused on the basics: getting out of debt, increasing their income, and investing some of their money for the future. According to Mr. Kiyosaki, investing in the stock market is for suckers. I guess Warren Buffett is a sucker.”

The next book listed is actually a Rich Dad Poor Dad spinoff/branded book, Rich Dad’s Advisors: Real Estate Riches by Dolf de Roos, picked by Will of Wisebread:

• Will @ Wisebread: “I blame books like this for the subprime mortgage crisis. This book is a glossy ad for real estate investment. The author spends most of his time trying to convince you how easy it is to make money from real estate. Charmingly written and marketed under the “Rich Dad” brand name, this book arms the novice investor with just enough information to be dangerous.”

The next book is another real estate related book, The Real Estate Coach by Bradley Sugars, not liked by FMF:

• FMF: “No new information and written in an annoying format. It’s told as the story of “Brian” and “Sarah” who are helped by a “Real Estate Coach.” Yuck! Please spare me the third-grade bedtime story and just give me the facts.”

And finally, Nickel dislikes yet another home related book, The Automatic Millionaire Homeowner by David Bach:

• Nickel: “This isn’t a particularly bad book, but… compared to The Automatic Millionaire, this book was more of the same with a slightly different twist. Sure, it’s motivational, but so are a ton of other financial books. Do yourself a favor and just read the original. Then pay off your mortgage early. There, I just saved you $12.95.”

So, which book did I think was terrible? Actually, it’s Rich Dad Poor Dad, which was disliked by four bloggers (really five). I think the general idea is sound, that you should have your money work for you instead of you working for your money, but I don’t like the game it plays. Kiyosaki’s “rich dad” and “poor dad” characters are silly but I think that’s the hook, that he can “point” to two different mindsets and use that to explain his point. Anyway, John T. Reed, who has “exposed” a bunch of real estate experts, shares his review of Rich Dad Poor Dad and I think it he hits the mark on the head.

What’s your most hated personal finance book and why? As an incentive, in about a week I’ll just randomly pick a few names from the list and send them some personal finance books I have lying around.

When I was younger, I had a book called “They Went That Away…” that researched what happened to famous figures after their moments in the spotlight. It’s a book I still have (somewhere) and it makes for some interesting trivia information. 100 Minds That Made The Market, written by Ken Fisher, the CEO of Fisher Investments and a name you might recognize on Forbes; is a similar book but focused on people in the financial industry and their impacts. I am by no means an investing guru, I know very little about the history of the markets and its influential participants; so I learned a tremendous amount from this book.

The thing I like the most about this book is that the little biographies are usually only a few pages. I’d say you can get through a biography in approximately ten to fifteen minutes and you can flip to any one of them in any order. While it might be valuable to read through the categories in order, only to get a sense of how these personalities may have interacted, it’s certainly not required. This made it possible for me to read it when I wanted, have frequent break-away points, and skip past biographies of individuals I wasn’t particularly interested in.

One of my favorite stories was about Elias Jackson “Lucky” Baldwin (starts on page 116, the first bio in The Innovators category). Essentially what happened was that Lucky tried to get into the California Stock and Exchange Board floor to check on his mining stocks, which were particular hot and speculative at the time, but was denied entry because he forgot his membership card. At the time, there was some new ore discovery and a bunch of non-members were trying to get in to buy up some mining shares so they started checking IDs. When Lucky forgot his card, one that he never needed, and was denied entry, he was furious. So what did he do? He started his own exchange, the Pacific Stock Exchange, and got twenty local members away from the California Stock and Exchange Board. That’s right, when they wouldn’t let him in, he decided to start his own stock market! (Eventually the California Stock and Exchange Board acquired Lucky’s Exchange in 1904, five years before his death) To think, he just up and decided to start his own stock market, steal twenty members, and actually succeeded. Pretty ballsy!

So, is this book worked buying? I think so, but I’m a sucker for trivia and learning about history. I don’t think this book is really for someone who wants to learn how to invest or find the latest stock tip, this is for someone who enjoys history, enjoys reading about the stock markets and why it is the way it is today (even if there are stories about guys with Wild Wild West names like Lucky), or enjoys little vignettes about interesting characters from the past. If you’re a fan of crunching numbers and random walks, this isn’t going to be a good book for you.

I’m a huge fan of these colored “Little Books” published by Wiley (some other ones that I think are good are The Little Book That Beats The Market and The Little Book of Common Sense Investing, which arguably has the biggest name author in Vanguard’s John Bogle) and this one probably looks the coolest because it’s black and gold. The Little Book That Makes You Rich is penned by Louis Navellier, spans 185 pages, and focuses on growth investing. Now, what’s the difference between this book and the others? Each of them focuses on a different aspect of income generation with respect to the stock market and each one has an expert writing it. The ones I’m aware of are:

• Common sense (red), which is about getting what you deserve from the market (a lot of talk about index funds),
• Value investing (green) is about finding down and out stocks (think Buffett’s cigar butts and his mento Graham’s Intelligent Investor)
• Beating the Market (blue) is a wrinkle on value investing that focuses on earnings yield and the business’s return on capital

Who is Louis Navellier? According to the inside flap of the dust jacket, he “has one of the most exceptional long-term track records of any financial newsletter editor in America.” Check out the first paragraph of a MarketWatch article that asks some questions about a new newsletter - “Witness Louis Navellier’s Emerging Growth. It’s the number one performer among 32 surviving letters followed continuously by the Hulbert Financial Digest over the last 20 years. Its portfolios have achieved an average annualized return of 19.8% vs. a dividend-reinvested return of 12.5% for the Dow Jones Wilshire 5000.” I’d say that gives Navellier enough credibility to write this book.

So what’s in this little guy? First, I like Navellier’s writing style and his general approach in this book. The preface begins by addressing (but not answering, that will come later) the one skeptical question I had: “how the heck is this book, little or not, going to make me rich!? It’s not that easy!” He will applaud you, tell you that you shouldn’t believe everything you hear, and that the next 185 pages will enlighten you to his approach that has given excellent returns over a spectacular time period (in fact, the eight factors he looks for are on page 3 - not buried on page 216, not that there are even that many pages, after reading a lot of charts and being built up, his eight factors are on page three).

What are these eight factors? Ha - get the book, it’s only $14 from Amazon and before I go any further I already recommend the book if you’re looking to get into growth investing. The balance of the book goes into each of the eight factors and points out one derailer that I will share with you. Navellier’s derailer is human emotion. He doesn’t believe in the story, he doesn’t believe in falling into or out of love with stocks, he says that all that will cloud the reality that lives in the numbers. Believing the latest buzz on the street, hearing some “tip” at a cocktail party, or believing any number of questionable information sources, only hurts your ability to make a good decision. Steve Forbes, in the Foreword, did say that Navellier has picked a few “clunkers,” but the overall performance of Navellier’s picks and his returns have been “enviable.”

Sneak a peek at your local book store to see if it’s for you.

When Flexo was giving away a SumoLounge Omni, I kind of wanted to win it but I knew I probably wasn’t going to win it so I asked Andrew at SumoLounge if they’d send me one and the obliged. No, the review I am about to write was not a part of any agreement, nor is the giveaway that will soon be announced, but I thought it would be fun to give away something hip and trendy, as opposed to personal finance books. So, what does a bean bag chair have to do with personal finance? Absolutely nothing. If you’re okay with that, onto what I think about the SumoLounge Omni.

Before receiving it, I half assumed that it would be similar to one of the bean bags chairs from my childhood. Back then, they were basically amorphous bags of polyester and nylon filled with little beans. When the Omni arrived, it was hardly amorphous and it really surprised me. The Omni is made from a sturdy (I hesitate to call it tough, but it’s not a slipper smooth polyester either) nylon that holds its shape (with the help of the beans). I actually found a perfect spot for it, in front of my television as I own 6 year olds at Halo 3 (I’d probably be playing Call of Duty 4 if it wasn’t for my XBox going blind), where I used to slide in an office chair. When my fiancée first saw the bean bag, she told me that it’s was probably an absolute certainty that I’d be gone to her for a long long time (she wasn’t complaining, just noting!).

If you’re looking for the hip urban look, I think these chairs look really cool in bunches in the corner. I think the color choices are really vibrant and at a scant $129 a pop (it sounds expensive at first but these things are huge) with no shipping, it’s not a bad idea to furnish with. It will also make you seem much cooler than you probably are. I was going to take some pictures of the chair and me in it but I had some friends come over and I snapped pictures of them instead, here’s one:

Okay I lied, they have more photos though…

To be entirely honest, when I was requested to take a look at Russell Bailyn’s Navigating the Financial Blogosphere: How to Benefit from Free Information on the Internet, I was a little surprised a book like this was going to be published… let alone by John Wiley & Sons, a reputable publisher. I accepted it because I really wanted to see if Blueprint for Financial Prosperity would be in it (it is!) and because I wanted to see what exactly Russell Bailyn would be saying about “my industry.” I didn’t know who Russell Bailyn was until I received the book’s information and he is a wealth manager with Premier Financial Advisors, a financial planning firm. He’s a big contributor at Seeking Alpha and Trading Markets, both of which have feeds that go right into Yahoo! Finance.

The main thrust of the book is that there is a tremendous amount of free information in the Internet in the form of forums, blogs, and other consumer generated media; and that information is made more valuable by virtue of all the contributors adding more to the discussion. That is, because people can post to a forum, because people can leave comments on a blog, that collective intellect is just as valuable as whatever an “expert” says. I wholeheartedly agree and listed that as one of the seven wonders of personal finance last week.

The book really is a resource about the resource that is personal finance websites and blogs. It covers many personal finance topics from a relatively high level (such as describing what a financial adviser is and does), sprinkling in some blogs or sites worth mentioning. It was definitely a vanity play for me to see a lot of sites I read be listed (including Blueprint for Financial Prosperity) but I find it difficult to recommend this book to anyone who is reading this review because you already know about personal finance blogs. You’re probably pretty web savvy and you don’t need a book to tell you that blogs are valuable (they are!).

If, however, you do have a blog, maybe you want this book because then you can say your blog is in a book.

The Quiet Millionaire was written by Brett Wilder, a Certified Financial Planner and President & CEO of Financial Management Group Inc., and it’s over 400 pages of relatively large print and chock full of useful information. The title of the book speaks volumes about the point of the book, which is the quiet accumulation and preservation of your hard earned wealth.

In addition to the dollars and cents, this book delves into the sphere of personal improvement, since the two are intertwined, and works to provide a foundation onto which strong personal finance principles can flourish. For example, the book immediately, in its introduction, talks about the fact that you need a goal in life before you ever start thinking about your finances. For example, he asks what you would do if you had all the money in the world? What would you do if you only had a few years to live? It’s the same principle I was trying to convey when I said that frugality is easier with a goal or purpose in mind. Well, that applies to almost everything.

Now, a book from a CFP wouldn’t be complete if they didn’t talk about their company’s hallmark. In this case, it’s the Financial Management Review. The FMR is a budgeting and planning framework that Wilder uses at his firm and it’s a well thought out framework. If you already have a budgeting process, it’s worth checking out to see what you can incorporate into your own. If you don’t, it’s worth seeing what types of frameworks are out there. (As a disclaimer, I’d say this about all frameworks, I think you have to tailor what you use for your own needs, no one framework will be perfect in the first shot)

One thing that this book touched on that I hadn’t seen before in a personal finance book was the idea of business ownership. He goes into the various phases of business ownership and I found it particularly interesting. Now, I just took an Entrepreneurship class so it was really a review; but if you hadn’t been in a class like that, then the chapter will probably open your eyes to the business ownership mindset.

Lastly, one other thing I noticed about the book was it’s relatively large font, which was surprisingly inviting. I hate opening a large book and being overwhelmed with tiny print, esoteric charts and graphs, and feeling like I’m being deluged with information. Some people enjoy feeling like they “got their money’s worth” when they open a book and see that, I actually hate it. I feel like I’m reading an encyclopedia instead of a book I want to read. That being said, that’s judging a book on features that really aren’t that important - you want to know if this book is worth buying, borrowing, or ignoring. My answer is that you should borrow it from the book, scan through it, and make your own decision on whether or not you should buy it. This book could be a valuable reference (if you’re looking for that type of book), written in easy to understand layman terms, and one designed for the “millionaire next door.” Stanley’s The Millionaire Next Door introduced you to your millionaire next door, then Wilder’s book teaches you step by step, in greater detail than Stanley, how you can keep up with the Joneses in a good way.

When I was asked to check out Negotiation Genius, by Deepak Malhotra and Max Bazerman, I wasn’t really sure how that would apply to all of you. Then I realized that everything in life is essentially a negotiation, whether it’s your salary, your job, anything you buy (like a house or a car); everything dealing with money is essentially a negotiation. So, with respect to that, this book is incredibly relevant to anyone interested at all in money and personal finance. Another reason I was interested in getting this book is because it’s published by the Harvard Business School and both Malhotra and Bazerman are leaders in executive education at Harvard Business School, so you know they have the pedigree to put out a book that has meaning and value.

The book is broken up into three parts. Part I is called the Negotiator’s Toolkit and it develops the framework that you can use to “analyze, prepare for, and execute almost any negotiation you might encounter.” The toolkit covers all the principles, strategies and tactics you may need to employ when you actually get to the negotiation table. Now, Part II is called The Psychology of Negotiation and it discusses “cutting-edge” research on negotiation and decision-making psychology. This section wants to take all that theory and be able to put it into terms that make them actionable. Part III, called Negotiating in the Real World, is where the boots hit the ground and collects all the “other” topics that didn’t make it into the neatly created buckets as before.

I haven’t read this cover to cover yet, picking a few pieces here and there that interested me, and it’s a high quality book and one that you’d expect from HBS. The book, like the HBS case studies, use a lot of anecdotal stories (the introduction starts with a story) which is something I really enjoyed. Would I recommend it for someone looking to get an edge at the car dealership? I wouldn’t, it’s a little more hardcore than that. If you deal with lots of negotiations as part of your job, this might be up your alley.