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Rating: 
Summary: Solid Introduction To Personal Finance
Review: "25 Myths You've Got To Avoid If You Want To Manage Your Money Right" is a great personal finance book. The book gives a solid overall philosophy to managing your money. It's probably best for new to intermediate investors.Each chapter begins with an investment or personal finance myth. Clements explains where each myth goes wrong and concludes each chapter with new rules to replace the myth. Clements discusses the myth that you should invest in bonds for income. He says that investors love bonds because they love income. But, Clements says that investors loving bonds is a "masochistic relationship" when we factor in all of the negatives of bond investing. Clements explains that the callable feature of bonds means that if interest rates drop significantly, bonds will probably be called in, depriving investors of the desirable and higher interest rate on their existing bonds. But, if interest rates shoot way up, the bonds won't be called in, and investors will be locked into receiving a low rate of return. Clements says that the call feature of bonds is a case of "heads I win, tails you lose." And, as much as investors love bonds, Clements notes that the taxman loves bonds even more. After factoring in taxes and inflation, Clements shows us that bonds are a dismal investment. (Especially when we toss in default risk and interest rate risk). The chapter about bonds is particularly good and will give investors much to think about. So, what about investors seeking income? Does Clements go along with the "No problem. Just sell some shares when you need some money" crowd? No. Clements realizes the inherent risk in needing to sell shares for income. The market might be down, and you could take a clubbing. Clements explains that stocks or mutual funds holding stocks "are your portfolio's engine of growth. Everything else is there to reduce risk, so that you won't get unnerved by market swings and can tap your portfolio for spending money without selling stocks at fire-sale prices." So rather than following the conventional advice of holding a portfolio balanced between stocks and bonds (usually 60% stocks and 40% bonds), Clements suggests investors consider holding a portfolio of 25% cash and 75% stocks. I strongly agree that this is something to consider. Ultimately, Clements tells us that it's our asset allocation which will determine the long-term rate of return our portfolio achieves. Rather than holding a portfolio composed of only 50% stocks and then trying to seek the next Microsoft, investors would probably do much better holding a higher percentage of stocks and foregoing the search for the next big winner. Clements says it's a myth that you can beat the market. In addition to not liking market timing, he doesn't believe in sector rotation, or individual stock selection. Further, Clements doesn't tend to like actively managed mutual funds. Because Clements is of the earliest columnists to cover the mutual fund industry for The Wall Street Journal, we should probably listen when he gives mutual fund advice. What typically happens, Clements explains, is that a superstar fund manager hits a streak. This might be due to his or her investing style coming into favor or it might be due to luck. Then typically the public relations department of the money management firm kicks in and the money under management balloons. Ultimately, the fund returns to moderate performance or bombs entirely. The superstars reputation fades away. A new superstar at another fund is born. Clements has seen too many superstar fund managers wipe out to believe it's worth his time seeking the best mutual funds among the several thousand existing funds. He recommends indexing your stock market money among larger U.S. stocks, smaller U.S. stocks, and foreign stocks. Clements includes a good discussion of the controversy surrounding whether to invest all of a lump sum at once or whether you should dollar cost average it into the market. He prefers dollar cost averaging it into the market as a means of reducing risk. Rather than aiming for the highest possible return, we want to minimize the risk of losing capital. Clements says we probably won't get a 10% rate of return on our investments and that the new "Disney World for the post-teen set" is using compounding calculators, plugging in estimated rates of return, to calculate how large their retirement nest egg will be. Considering inflation, Clements corrects us showing that, due to inflation, the real return on stocks is closer to 7% a year. Those compounding calculators are fun, aren't they? I disagree with some of Clements' advice. What he says about building a credit cushion rather than holding excessive savings in a low-yield, money-market fund is good. But, I'd much rather count upon a home equity line of credit than a (gulp!) margin account at a brokerage, which he suggests as an option. Clements also suggests that if you're wealthy you probably don't need umbrella liability insurance as you can self-insure this risk. He says the same about health insurance. How rich is rich? We're not talking $5 million here. I'd recommend retaining both health insurance and umbrella liability insurance regardless of your wealth. But, as Clements says, you probably can forego termite reinfestation insurance. You can absorb the cost of annihilating the little bugs yourself. Finally, "25 Myths You've Got To Avoid If You Want To Manage Your Money Right" has a great discussion of why you might not want to max out your (non-Roth) IRA, but consider holding a global index portfolio in a taxable account instead. In addition to not having access to the money for a long-time, you're converting capital gains into more heavily-taxed income with the non-Roth IRA. Peter Hupalo, Author of "Becoming An Investor"
Rating:
Summary: A fast read and compelling
Review: I read the book and found many compelling points about investing and related topics. I will insure my 18 year old son also reads it. Get the book - it is worth every penny.
Rating:
Summary: This book takes the dread out of investment education.
Review: I'm a freelance writer and jazz musician. Nothing makes my skin crawl like a typical discourse on "wise" investing. Like dental work, investment education frequently centers around the idea of pain and shame as inevitable consequences of despicable indulgence. "It's all so simple and self explanatory if you would just buckle down and do it. And remember - if you don't, you'll be sorry," intones the Victorian voice. "25 Myths" is different. Its beauty is two-fold. First, it exposes the flaws in traditional investment strategies, thus validating my misgivings. Second, it provides an easy-to-latch-onto structure that the reluctant beginner can use to get started. Perhaps Clements' most important precept is that we should ignore short term market fluctuations focusing instead on the real enemies - taxes and inflation. From there, he goes on to outline several beginners' axioms from which one's first investment strategy may be painstakingly! formulated. Has he uncovered the holy grail? Probably not, and he's the first to admit it. Remember the old saying, "you have to know the rules in order to break them?" Clements has set down a list of rules - not familiar chestnut adages but pragmatic responses to the investment climate as it exists today. In a field overrun with "paralysis by analysis," Clements forgoes the role of beacon in the darkness, and instead simply shines a flashlight in a darkened garage to guide us to safety.
Rating: 
Summary: Myth #26: This is a great investment book
Review: I'm a freelance writer and jazz musician. Nothing makes my skin crawl like a typical discourse on "wise" investing. Like dental work, investment education frequently centers around the idea of pain and shame as inevitable consequences of despicable indulgence. "It's all so simple and self explanatory if you would just buckle down and do it. And remember - if you don't, you'll be sorry," intones the Victorian voice. "25 Myths" is different. Its beauty is two-fold. First, it exposes the flaws in traditional investment strategies, thus validating my misgivings. Second, it provides an easy-to-latch-onto structure that the reluctant beginner can use to get started. Perhaps Clements' most important precept is that we should ignore short term market fluctuations focusing instead on the real enemies - taxes and inflation. From there, he goes on to outline several beginners' axioms from which one's first investment strategy may be painstakingly! formulated. Has he uncovered the holy grail? Probably not, and he's the first to admit it. Remember the old saying, "you have to know the rules in order to break them?" Clements has set down a list of rules - not familiar chestnut adages but pragmatic responses to the investment climate as it exists today. In a field overrun with "paralysis by analysis," Clements forgoes the role of beacon in the darkness, and instead simply shines a flashlight in a darkened garage to guide us to safety.
Rating: 
Summary: Good for the financial beginner.
Review: If you're not hip on financial stuff, this is not a bad book to start with. If you're like me, however, and you regularly read Kiplinger's Personal Finance, Money or the business section of the paper, you don't need it. It seems like the author took all the sound advice that was printed in the last five years, heck, the last year, and consolidated it, not that there's anything wrong with that. But if you've already read it in magazines and newspapers, it's a waste of money. I would recommend the financial books by Eric Tyson in the For Dummies series before this one. Aside from the financial advice, the author finds it necessary to constantly give his resume and cite his expertise. A little too self-promoting. The list of his credentials on the back flap was enough.
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Summary: Has your portflio really out-performed Index Funds ?
Review: The author definitely beats home some basic messages about inflation, tax implications and trading costs that might be old news to some seasoned investors. He loves stocks and hates bonds. The most important thing I took away from this book was that even if you manage to pick a mutual fund that beats the S&P over a 30 year period, the costs incorporated into even no-load mutual funds can eat away at what little gains you might make over indexes. His remedy: Invest in stocks for the long term (nothing new here) and diversify your portfolio with the cheapest domestic and international index funds you can find. He recommends Vanguard's Total Stock Index Fund and Vanguard Total International fund. I read the book in the spring of 2002, which makes some of the information in the 1997 printing I had a bit dated (e.g. no 529 tax deferred education savings plans). If you're looking for a more updated version with a lot of the same ideas, try Glassman's Secret Code of the Superior Investor.
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Summary: Good, Logical Recommendations -- Quick Read
Review: This book covers the 25 myths about managing money. What makes this book better than others is that it gives you the background logic behind the decisions. For example, the author discusses the myth of buying the biggest house possible and why this mindset was successful in the 70s & 80s (and could be again) but isn't a good idea in today's economy. The author further shares the "forumula" behind the logic -- inflation rates, present/future value of money, and lost opportunity. The 25 Myths are nothing surprising, but you will find that the logic is refreshingly simple and easy to apply to your financial situation.
Rating:
Summary: Good, Logical Recommendations -- Quick Read
Review: This book covers the 25 myths about managing money. What makes this book better than others is that it gives you the background logic behind the decisions. For example, the author discusses the myth of buying the biggest house possible and why this mindset was successful in the 70s & 80s (and could be again) but isn't a good idea in today's economy. The author further shares the "forumula" behind the logic -- inflation rates, present/future value of money, and lost opportunity. The 25 Myths are nothing surprising, but you will find that the logic is refreshingly simple and easy to apply to your financial situation.
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