I’ve been a little behind on reviewing books and so this next review is on a book published last year. It’s Smart is the New Rich by Christine Romans and it’s a 299 page book published by Wiley. The book is a general personal finance book, as opposed to one focused on a specific subject like debt or investing, and written by someone who has covered the range extensive.

Christine Romans is the host of Your Bottom Line, CNN’s Saturday personal finance show, and regular contributor to CNN’s AMerican Morning and other CNN programs. She’s had a career in personal finance journalism and received an Emmy Award in 2004 for “Exporting America,” a Lou Dobbs Tonight investigation on the impact of globalization on the U.S. worker.

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I had the opportunity get a demonstration of the new TurboTax 2011 online tax preparation package and I came away very impressed with the level of automation they included. Last year, the most impressive new additions was the ability to flag certain parts (which would’ve prevented me from having to file an amended return after I put in a placeholder value) and their audit scanning feature (looks for red flag mistakes like mismatching numbers).

This review of TurboTax applies to the software used to handle Tax Year 2010 returns.

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We’ve had a slow cooker in our kitchen repertoire for several years now and in that time we’ve made fewer than a dozen dishes in it. For those keeping score at home, that’s about one every three or four months. The reason we don’t use it as much as we probably could has to do with our lack of creativity in the slow cooking department. Our cooking is very much dominated by our ideas. We think of things we enjoy and we try to make them, or dishes similar to them, which leads us to a lot of stews, which take just as long to cook, but never to stews in a slow cooker. I chalk it up to having not grown up with a slow cooker (it’s not prominent in Chinese cuisine) but the reality is I’ve had no inspiration, since I love plenty of things I didn’t grow up eating.

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The 10 Commandments of Money by Liz Weston is a personal finance book that looks at ten money principles and how they’ve changed in our post-bubble economy. At the start of each chapter, Weston shares the “old-school” mantra, follow by the “bubble economy” mantra, and shares with us the new rules. The chapter then launches into a personal finance principle, she calls them commandments, that I consider essential in a good personal finance system. The key insight is that for each commandment, the new rules represent a more efficient and effective way to implement the old rules. I think this will be clearer when we look at an example later on.

Quick disclaimer: I’m friends with Liz Weston so please keep that in mind when you read my review. Heck, if you look on page 13, she mentions Bargaineering as one of her favorite sites… so just know I’m biased because she’s awesome.

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Be a Dividend Millionaire by Paul Rubillo is not just a book about dividend investing – there are a million of those. Be a Dividend Millionaire is a personal finance book that shows you how to integrate dividend investing as a way of building wealth on top of a solid foundation that everyone needs to have.

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Debt Free for Life is David Bach’s latest personal finance book and the first, as far as I know, that focuses entirely on the subject of debt.

David Bach’s most well known book is The Automatic Millionaire, which pushed the idea that the easiest way to “get rich” was to put it on autopilot. Automatic savings, whether to a bank account or a retirement account, is the key to a prosperous retirement. It’s one of the powerful pieces of personal finance out there. Since then, he’s written Start Over, Finish Rich which has spawned a whole “FinishRich” line of books, live events, and coaching.

In previous books, it was always about putting together a system that sets you up for the rest of your financial life. Set an automatic monthly contribution to your 401(k), check in each year to rebalance, and retire comfortably (that’s the skeleton, you have to put the meat on it by researching investments, etc.). This is one that focuses entirely on debt, how to pay it down faster, how to get out of it (from legally walking away to working with debt settlement companies), and how to stay away from accumulating more debt in the future.

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The Power of Passive Investing by Richard Ferri explains why investing is so much easier when you do it passively through index investing. If this sounds like John C. Bogle, founder of Vanguard, then you won’t be surprised to learn that he wrote the foreword to this book! (or that Ferri was a co-author of The Bogleheads’ Guide to Retirement Planning)

There’s one quote in the book that I think sums up why passive investing is a good idea: “Investment greats such as Warren Buffett, Peter Lynch, and David Swensen are all outspoken advocates for passive investing. In addition, the U.S. government’s Thrift Savings Plan (TSP) for federal employees has only passive investment options available for participants.” When you couple that with the statistics and research that Ferri has put into the book, it’s a combination of facts that become very difficult to refute if you want to advocate active investing.
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In the last ten years, I’ve read a lot of personal finance content. Whether it’s in books, magazine articles, or just chatting with friends, I’ve come into contact with a lot of good, and bad, personal finance advice. One thing stands out, the vast majority of the advice focuses on tactics. It focuses it on what you should be doing, rather than how you should be thinking. The strategy seems to be “fake it until you make it,” that is, do the right things until they become habit.

Farnoosh Torabi takes a slightly different approach, as you can guess based on the title, and advocates changing your mindset first and letting these behavioral changes direct you in the right direction. The book helps you develop those good habits by starting with your mindset, rather than starting with the habits and hoping they change your mindset.

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