Some people, on discovering a need to learn about a subject that's currently a mystery to them, will ask people they know. Some will take a class. Some will rely on the internet. Some will read a book. And some will read ALL the books.
I'm one of those who will tend to read all the books, or at least as many as I have access to, and time for. Fortunately for my budget, I've learned not to buy such books unless I'm certain that they'll be useful beyond the first reading. Mostly, I borrow from the library, and spend an occasional evening at a bookstore perusing their books.
As I mentioned in my previous post, money is one of the three major things I'm thinking about these days (the other two being my MA thesis, and the baby I'm carrying), and my interest in the topic has resulted in a reading binge; I've borrowed quite a number of books from the library and from my dad's bookshelf.
Here are some of the books I've read thus far, with nano-reviews of each.
Rich Dad, Poor Dad This is one that if I had bought, I'd be embarrassed to admit it - there's a lot of salesmanship and pseudophilosophizing here. But it's less boring than a lot of books out there, and makes some interesting points. The main point is that many of the attitudes that people hold about money (including the reluctance to even think about it) prevent them from becoming wealthy. Useful for: thinking "outside the box", getting started thinking about money in general.
The Average Family's Guide to Financial Freedom One that's written by a "normal" couple, not some financial planner or hotshot investor. Lots of practical advice on frugality, debt reduction, and conservative investing. Useful for: getting started, living below your means.
Leg the Spread A riveting adventure story about the high-risk world of futures trading, focused on the few women who participate. Not a how-to, although you pick up some of the terminology along the way. Useful for: entertainment, and an inside look at part of "the Market" and the people that make a living by trading.
How the Stock Market Works A guide to the mechanics and behind-the-scenes happenings that make up what we think of as "the Market." Goes into a fair amount of detail about what actually happens when you place a trade order, or when a company makes a public offering of stock. On my first read, a lot of it was too detailed for me and/or went over my head, but I will likely read it again. Useful for: It's like a book explaining what happens inside your car when you're driving, and how road systems are developed and maintained, as opposed to giving you advice on how to drive.
Two for the Money Co-written by twin brothers, both professional financial advisors but who differ sometimes in their approaches and opinions. Aimed at "baby boomers" but has a good all-around overview of dealing with personal finances, from the basics of getting organized to the complexities of choosing investment vehicles for retirement, college savings, and so on. Useful for: covering the breadth of personal money management without getting too bogged down in the complicated stuff.
The Undercover Economist If you read Freakonomics and liked it, this book is in a similar vein, but not quite as sexy. Has some interesting stuff about a wide range of topics, from how grocery stores price their goods to global trade economics and the environment. Useful for: thinking about "everyday economics" and pondering the economic aspects of politics and environmental issues.
Die Broke I couldn't resist the title, especially since right next to it on the library shelf was another book called "Don't Die Broke." Unlike many personal finance books that try to use fear to put you on the path of the money-righteous, this one aims to reduce fear. The main points are 1) Don't make yourself panicky by setting some arbitrary date for retirement, many people are actually happier and healthier if they keep working. Just go at your own pace, building up assets that will support you once you're no longer able to work or no longer want to. 2) The ideal of passing on an inheritance is outdated; it's much more efficient (because of estate taxes) and much more enjoyable to pass on your wealth while you're living. Useful for: some contrarian ideas on retirement planning.
This is Not Your Father's Stockpicking Book Actually, I did borrow it from Dad. But anyway, it uses lots of examples to show how cues from everyday life, that most people don't think have anything to do with stocks, can be used for investing ideas. The weather, politics, television shows, fads, and advertisements are the main signal sources discussed. Useful for: learning about some of the things that affect stock prices.
The Warren Buffett Way It's impossible to take even a passing interest in investing without hearing about Warren Buffett. This book isn't written by the guru himself, but is about him - it is a sort of biography focusing on his business and investment decisions. Useful for: An insight into the life and strategies of the most successful investor in recent history.
And here are some other books that I'm currently reading, or plan to read in the near future, and why:
Unconventional Success: A Fundamental Approach to Personal Investment - Why most mutual funds are not a good place for your money. Right now nearly all my investments are in mutual funds, so I'm curious what this guy has to say about them that's so bad.
Rule #1 - A system for picking individual stocks, mostly based on the fundamentals of the companies. A mass-marketed, sometimes tacky, but understandable approach to applying a Warren Buffett-like investment strategy.
The Bogleheads' Guide to Investing - I've heard it's a good "getting started" book.
Your Money and Your Brain - What is going on, neurobiology-wise, when you make investment decisions. Why people tend to make dumb moves when investing, even when they know better.
The Alchemy of Finance - A lofty-minded tome by famous successful investor George Soros.
Friday, January 25, 2008
Wednesday, January 23, 2008
Goals, 2008
I've never been one for resolutions. Not at the new year, or really any other time. The cynic in me says that if the resolution-maker (whether it's me or someone else) really has both the desire and the ability to change, they would already have done it, and not waited until January 1.
But the idea is firmly entrenched in our culture that the transition from one calendar year to the next is an ideal time to take stock of where you've been, and where you're going. 2006 and 2007 were eventful years for me, with a lot of changes that I would not have foreseen. At the beginning of 2006, I was a graduate student in Kansas, working towards a PhD in ecology, living in an apartment, with no near-term plans of buying a house or starting a family. The end of 2007 found me in Pennsylvania, employed at UPenn in a cell biology research lab, while simultaneously making gradual progress on a Master's, discovering the joys and pains of homeownership, and expecting a baby girl in April.
So, they're not exactly resolutions along the classic lines of "lose weight, quit smoking, spend more time with family." But I do hope to achieve certain goals for 2008:
- complete my Master's degree at KU
- increase my salary
- add $8000 to our savings/investments
- write to one friend or family member each month
These are the primary goals, and I figure that with a new baby that will take up much of my time and energy, that is plenty. There are numerous lesser goals or related aims that I could also list (get more organized, get parts of the thesis published, get various things fixed or improved around the house, and so forth), but I'm sticking with goals that are quantifiable, so that at the end of the year I can easily say whether or not they were achieved.
Many people that know me might be surprised to see that two of my goals are financial in nature. In the past, I was never especially interested in money. As long as there was enough to meet our immediate needs, and preferably to put some into a savings account as well, I didn't care how much we earned, or how much we spent. But owning a house and preparing for parenthood have changed my perspective. As the one who does most of the banking and bill-paying, I had become vaguely aware that since we bought the house (almost exactly a year ago), our bank account wasn't shrinking, but it also wasn't growing. It occurred to me that this was a worrisome state of affairs if our expenses were slated to increase and/or our income would decrease. I decided that a more proactive approach was needed, and that I should learn something about managing money other than "don't spend more than you have." So, I used Quicken to help me collect data on our spending, and I started borrowing books about personal finance from the local library. Together we started talking about planning for the future (farther ahead than next month's bills), about budgets and saving and strategies for investing. So far, we're only two months into our efforts to be more financially responsible, but I think we've made a lot of progress. We've set up a budget that should be workable when the baby arrives, and that includes saving up some money. We're still pondering what to do with our savings once it has been set aside; I still feel like I have a lot to learn about investing. Overall, the plan is to keep some in savings, and to invest some. The allocation to each, and the types of investments we make, have yet to be decided.
But the idea is firmly entrenched in our culture that the transition from one calendar year to the next is an ideal time to take stock of where you've been, and where you're going. 2006 and 2007 were eventful years for me, with a lot of changes that I would not have foreseen. At the beginning of 2006, I was a graduate student in Kansas, working towards a PhD in ecology, living in an apartment, with no near-term plans of buying a house or starting a family. The end of 2007 found me in Pennsylvania, employed at UPenn in a cell biology research lab, while simultaneously making gradual progress on a Master's, discovering the joys and pains of homeownership, and expecting a baby girl in April.
So, they're not exactly resolutions along the classic lines of "lose weight, quit smoking, spend more time with family." But I do hope to achieve certain goals for 2008:
- complete my Master's degree at KU
- increase my salary
- add $8000 to our savings/investments
- write to one friend or family member each month
These are the primary goals, and I figure that with a new baby that will take up much of my time and energy, that is plenty. There are numerous lesser goals or related aims that I could also list (get more organized, get parts of the thesis published, get various things fixed or improved around the house, and so forth), but I'm sticking with goals that are quantifiable, so that at the end of the year I can easily say whether or not they were achieved.
Many people that know me might be surprised to see that two of my goals are financial in nature. In the past, I was never especially interested in money. As long as there was enough to meet our immediate needs, and preferably to put some into a savings account as well, I didn't care how much we earned, or how much we spent. But owning a house and preparing for parenthood have changed my perspective. As the one who does most of the banking and bill-paying, I had become vaguely aware that since we bought the house (almost exactly a year ago), our bank account wasn't shrinking, but it also wasn't growing. It occurred to me that this was a worrisome state of affairs if our expenses were slated to increase and/or our income would decrease. I decided that a more proactive approach was needed, and that I should learn something about managing money other than "don't spend more than you have." So, I used Quicken to help me collect data on our spending, and I started borrowing books about personal finance from the local library. Together we started talking about planning for the future (farther ahead than next month's bills), about budgets and saving and strategies for investing. So far, we're only two months into our efforts to be more financially responsible, but I think we've made a lot of progress. We've set up a budget that should be workable when the baby arrives, and that includes saving up some money. We're still pondering what to do with our savings once it has been set aside; I still feel like I have a lot to learn about investing. Overall, the plan is to keep some in savings, and to invest some. The allocation to each, and the types of investments we make, have yet to be decided.
Subscribe to:
Posts (Atom)