Your Take 

Your Take: Your Favorite Personal Finance Book

Every year, hundreds of personal finance books are published. Every year, personal finance bloggers, experts, and columnists always refer back to a handful of books that have stood the test of time. Many bloggers are fans of Your Money or Your Life and the Richest Man in Babylon, many investors call The Intelligent Investor their Bible, and lots of people look up to the books of Suze Orman, Dave Ramsey, and Robert Kiyosaki.

I want to know, what is your favorite personal finance book ever? It can be the book that has had the most impact on your life, the book that you most enjoy reading, or the book you’d most likely recommend to a friend.

I’ve listed my must read personal finance books and even written one sentence summaries of ten personal finance books, but have I ever told you my absolute favorite?

The Motley Fool’s Money Guide by Selena Maranjian. As they say, you never forget your first. This book was the first personal finance book I ever read, back in 2003 when I started my first job, and it gave me all the tools to help me succeed. The best thing about the book was how broad it was. It gave me a sense of the landscape and enough of a vocabulary that I could learn anything Maranjian missed by researching it on my own. Is it the best book? That I can’t say, but I do know it’s my favorite.

So what’s yours?


Review: Financial IQ by Robert Kiyosaki

Financial IQ by Robert KiyosakiI think Financial IQ by Robert Kiyosaki is a good “big financial picture” book that can help some re-frame the way they think about money and the impact money has on their lives. He talks about various Financial IQs and how the rules of money has changed, all of which are important ideas to think about. I’m not saying he’s right, but he certainly raises questions that require additional investigation. I don’t think you should take anyone’s opinions, and that’s what a book like this is really about, as pure gospel without reviewing the details for yourself. For an example of this, let’s take a look at one of the rules that have changed, according to Kiyosaki.

Gold Standard

Kiyosaki repeatedly states that the rules of money changed in 1971. 1971 was the year that President Nixon took the United States off the gold standard. Kiyosaki goes on to explain how that turned our dollars from “money” to “currency,” and how all currencies will eventually move towards being worthless. Besides being a little inflammatory and doomsday-ish, the point is somewhat valid as the concept of inflation is just that – our money is worth less and less each year. Is this true?

If every nation’s money is pegged to gold, what you have are pieces of paper worth exchangeable for different amounts of gold. If you have that, then exchange rates are all fixed and there is no inflation. What ends up happening is that instead of inflation handling the differing growth rates in countries, you would have a shifting of gold reserves. If a country’s gold reserves go down, then you end up deflating and have to pay people less and then they can’t pay their debts and all sorts of bad things happen (at least according to this interesting article by Peter Bernstein. So… while inflation seems bad, it’s not as bad as deflation. So, the lesson of the day is to trust but verify. 🙂

Financial IQ’s

The five basic financial IQs are:

  1. Making more money.
  2. Protecting your money.
  3. Budgeting your money.
  4. Leveraging your money.
  5. Improving your financial information.

The importance of these financial IQs is that these are the five areas you need to educate yourself on about money, having a high IQ in one area does not mean you have a high IQ in any of the others. Just because you’re good at making money doesn’t mean you’re good at protecting it or leveraging it. I think we can all agree with that but we’d also agree that this is hardly groundbreaking information. Let’s take a look at the first Financial IQ: Making more money.

IQ #1. Make more money!

The key to making more money is learning from your mistakes and solving your problems. Kiyosaki begins this chapter with stories of his younger years as he left a lucrative job as a third mate on an oil tanker to enlist in the Marines for Vietnam, then opting to become a Xerox salesman rather than return the oil business so that he could pursue the path of entrepreneurship. He goes on to explain the rest of his successes and failures with the point being that you have to learn from your mistakes in order to find the right path for you. (there’s also a little bit of Seth Godin’s The Dip in there, where you don’t settle for your local maximum)

Many of the other chapters are like this, very high level, and it’s something that JD of Get Rich Slowly complained about in our chat the other day. The problem with being at such a high level is that it requires the reader to bring it down to the street level, where you take those ideas and act on them. If I remember correctly, JD wasn’t a big fan of that because sometimes we need actionable advice and this book just doesn’t deliver on it.

I have a different take, I appreciate the high level look and brain stimulation. I never thought about the impact of coming off the gold standard (I am only 27) and some of the other viewpoints brought on by Kiyosaki and so I welcome the ideas he’s pushing. Some of them aren’t too groundbreaking, but some of them do intrigue me.

If you’re looking for or need a step by step guide or something like that, I don’t think you’ll like this book very much. If you are looking for something high level, I think this one may stir up your brain a little and get those juices flowing.

 Devil's Advocate 

Ignore Personal Finance Experts

Devils Advocate Logo
This is a Devil's Advocate post.

What do Suze Orman, Robert Kiyosaki, David Bach, and every other personal finance expert out there have in common? They don’t know you but they know exactly what’s wrong with you and how to fix it. Suze Orman thinks you’re a moron, that you need tough love, and that those 0% financing offers from Ford are awesome. Robert Kiyosaki says that you suck like his poor dad (who isn’t real), you should aspire to be like his rich dad (who also isn’t real), and that you should buy one of his books. David Bach thinks, without the indignation that comes with a Suze orman, that you should get out of your own way and make things automatic. I think you should ignore personal finance experts… all of them.

You might think this is a self-serving Devil’s Advocate post – and it is, because personal finance bloggers aren’t experts. Then again, bloggers don’t treat you like crap and tell you how you need a wake-up call (that’s Suze), bloggers just write about themselves and invite you to check out how normal and bad at personal finance we are. Experts? Heh, totally different animal… here’s why you should ignore them.

Cater To The Masses

This isn’t really their fault, it’s a product of the marketing machine that drives their popularity. On the web, you have folks who talk about themselves and by nature fall into a small niche. You have the family of six, you have the bloggers battling debt (or just finished), you have a fee-only certified financial planner (JLP has never ever written a post selling his services), you have the husband-wife tandem, and you have a whole host of other blogs that fall into one niche or another. None of those sites are trying to be everything, they’re only trying to be themselves and therein lies their popularity. When you graduate, you perhaps find the debt bloggers and the tandem bloggers to be your thing. As you get older, you might find the family of six or the CFP blog more your style. With so many options, you can find one that works for you.

Too General

Since they cater to the masses, usually their advice is too general to be of true value. I’m not saying that bloggers are better in this case, I’m just saying that experts aren’t going to give you the level of advice that you need. I’m also not saying you should run out to a financial planner and pay for advice, I’m recommending that you ignore the big names in the bright lights and read articles written by folks who aren’t so keen on hearing or reading themselves. Read from the perspective that you’re reading valuable information that may not be valuable for you. Don’t read from the perspective that you’re going to do the next thing that comes out of an expert’s mouth. Experts in any field are wrong often enough that listening to them 100% of the time will result in disappointment.


A product of their popularity is the fact that experts simply aren’t accessible. You can certainly try to ask them a question but the reality is that an answer won’t be thought out and personalized. If anything, you might get it read on-air and get a simple 30-second response (or a 5 minute chastizing). Why is accessibility important? It’s not tremendously important but if you have a specific problem and you want to hear an experts opinion, the likelihood of them happening to answer that problem is zero.

Was that a compelling enough argument against experts? Maybe, maybe not, please let me know. Think I was too harsh of Suze Orman? (I don’t think I was as harsh as she generally is) Think David Bach shouldn’t have been lumped in with the experts? Fire away!

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