Saturday, April 2, 2011

Money myths debunked in these books

The Associated press published a series of stories about financial myths this week. True to form, they followed that theme with their weekly business book review, "Bookshelf," as well.

Below are the AP's mini-reviews of six new books that examine some money myths. They may just inspire you to look at your finances in a different way. Thanks AP.

Bookshelf: Cutting through money misinformation
The Associated Press

TITLE: Debunkery: Learn It, Do It, and Profit From It — Seeing Through Wall Street's Money-Killing Myths

AUTHOR: Ken Fisher

PRICE: $27.95

E-BOOK: Available for iPad, Kindle, Nook, Sony Reader

SUMMARY: "Debunkery" is the seventh book by Ken Fisher, the founder and CEO of Fisher Investments, a money management firm overseeing more than $32 billion. In his latest work, Fisher attacks common myths and misperceptions, and shows readers how to analyze and discredit them. He divides the discussion into five sections: Basic Bunk to Make You Broke; Wall Street "Wisdom"; "Everyone Knows"; History Lessons; and It's a Great Big World! Each of the 50 chapters is dedicated to one misperception and is typically only three to five pages long. The short discussions enable you to pick and choose what's most interesting for your financial situation.

QUOTE: "Once you intuitively accept that 1) lots of commonly accepted investing wisdom isn't wise, and 2) you will still make mistakes anyway but can aim to lower your error rate and improve your results, actually doing debunkery can be easy. Simple really!"

PUBLISHER: John Wiley & Sons Inc.

— David Pitt

TITLE: The Wall Street Journal Guide to the New Rules of Personal Finance

AUTHOR: Dave Kansas

PRICE: $16.99 (paperback)

E-BOOK: Available for iPad, Kindle, Nook, Sony Reader

SUMMARY: It makes sense that we should be acting differently about our money in the wake of the financial crisis. Some time-tested lessons of personal finance still hold true: saving, budgeting and avoiding over-borrowing and overspending. But Kansas makes a persuasive case that we need a new way of thinking to replace others that failed us, such as overreliance on the stock market and real estate.

One new rule is to really embrace thrift and abhor loading up on debt. As this veteran personal finance writer puts it, debt is deadly and credit cards are cursed objects. Another is that diversification really matters, not just in stocks but in retirement planning — IRAs, insurance plans and savings accounts in addition to 401(k)s.

When it comes to investing, be where the action is going to be: international markets and commodities such as oil, gold, wood and other natural resources. Other chapters focus on debt reduction, spending smarter on your home and other important topics.

If the lessons aren't all brand new, the focus and priorities are. In plain language, Kansas offers wise advice that points out a clear path to a stable financial future for those who follow it.

QUOTE: "The New Rules aren't simply quick fixes to financial problems. Instead they're about learning how to save, invest, and plan better, and they require discipline, prudence, and taking personal responsibility for your financial future. They're also about understanding that financial strategy is about more than money."

PUBLISHER: HarperCollins.

— Dave Carpenter

TITLE: Spousonomics: Using Economics to Master Love, Marriage, and Dirty Dishes

AUTHORS: Paula Szuchman, Jenny Anderson.

PRICE: $26

E-BOOK: Available for iPad, Kindle, Nook, Sony Reader.

SUMMARY: Forget the flowers and romantic getaways. If you want a happy marriage, think like an economist.

That's the premise of this new release by Wall Street Journal editor Paula Szuchman and New York Times reporter Jenny Anderson.

The authors have fun with their theory by taking 10 economic principles and explaining how they can be used to avoid the common pitfalls of marriage.

In the opening chapter, for example, the authors invoke Adam Smith's "The Wealth of Nations" in arguing for a division of labor based on skill sets, rather than automatically splitting chores 50-50. Another chapter titled "Moral Hazard, Or the Too-Big-to-Fail Marriage" discusses how the emotional safety of marriage can lead spouses to take each other for granted and wear away at a relationship.

And in "Trade-Offs, Or the Art of Getting Over It," Szuchman and Anderson encourage examining spats through a cost-benefit analysis rather than letting minor grievances fester.

On their own, marriage and economic theory aren't exactly fertile ground for lighthearted reading. But by bringing them together, "Spousonomics" injects some levity into both.

QUOTE: "At its core, economics is way simpler than all that. It's the study of how people, companies and societies allocate scarce resources. Which happens to be the same puzzle you and your spouse are perpetually trying to solve: how to spend your limited time, energy, money and libido in ways that keep you smiling and your marriage thriving."

PUBLISHER: Random House

—Candice Choi

TITLE: Give Smart: Philanthropy That Gets Results

AUTHORS: Thomas J. Tierney and Joel L. Fleishman

PRICE: $23.99

E-BOOK: Available for iPad, Kindle, Nook, Sony Reader

SUMMARY: What's so difficult about giving away money? After all, it's earning the money that's challenging. Well "Give Smart" aims to dispel the notion that successful philanthropy is as easy as writing a check.

While recognizing that there isn't one model that fits everyone's needs, the authors encourage philanthropists to develop a strategy that fits with their values and circumstances. Much of this can be achieved by focusing on a set of six essential questions, including "What is 'success' and how can it be achieved?' as well as "What am I accountable for?"

For example, it can be difficult to pin down the results of certain philanthropic gifts, such as those supporting social and environmental changes. So it's important to have a clear vision of your goals so you can determine if progress is being made, or if you need to adjust your strategy.

Whatever your means, "Give Smart" provides an interesting discussion to help you evaluate your own charitable contributions. Readers don't have to go through the rigorous analysis outlined here, but "Give Smart" can help you think about how you're measuring the success of your own donations and whether you might be able to put your time and money to work more effectively.

QUOTE: "All too often, philanthropists who are demonstrably lost give themselves an 'A' for their efforts, declare victory, and move on to new challenges. The only people who spot the underlying failures are those who needed the help, and didn't get it."

PUBLISHER: PublicAffairs

— Trevor Delaney

TITLE: The 10 Commandments of Money: Survive and Thrive in the New Economy

AUTHOR: Liz Weston

PRICE: $25.95

E-BOOK: Available for iPad, Kindle, Nook, Sony Reader

SUMMARY: Personal finance columnist Liz Weston starts by acknowledging that the traditional way to prepare a budget doesn't work for everyone, and prescribes a new approach that skips tracking every penny spent in a little notebook. She advocates keeping "must-have" expenses limited to 50 percent of income. That would include items such as housing, utilities, food, child care, minimum debt payments and possibly a car. Limiting overhead, she explains, provides flexibility, helps make it clear what's affordable and what's not, and makes it possible to afford some of life's pleasures.

Flexibility is a recurring theme as she helps readers adjust their planning to suit the current economy. Each of the 10 chapters offers a commandment for a different aspect of personal finance. The focus is on how the rules have changed and the steps needed to create a financially secure future.

QUOTE: "It's not up to me to tell you how to live your life or spend your money. It's up to you to do some soul-searching — and research — and then make some decisions about your spending, even if it means accepting some pretty big changes in your life."

PUBLISHER: Hudson Street Press

— Eileen AJ Connelly

TITLE: Don't Buy the Bull: Dispelling Disastrous Investment Advice and Money Myths in Our New Economy

AUTHOR: Cassandra Toroian

PRICE: $22.95

E-BOOK: Not available

SUMMARY: Cassandra Toroian, chief investment officer with the money management firm Bell Rock Capital, seeks to debunk 23 financial and investing myths that she says have become pervasive. Toroian faults other personal finance experts for perpetuating outdated advice. For example, she argues that buy-and-hold investing for the long-term doesn't work in an era when many blue chip names like Lehman Brothers and General Motors can collapse or end up in bankruptcy court.

She also challenges the notion that dividend-paying stocks are almost always a good long-term choice. And, contrary to popular belief, notes that not all debt is bad. The book is written in a conversational style. So even if you don't accept her provocative arguments, you can zip through the 128 pages and decide for yourself without investing too much time.

QUOTE: "The next time a personal finance guru gives you a definitive 'do' or 'don't' regarding some sort of financial decision, keep in the back of your mind the phrase, 'Don't buy the bull!' We're still in for a wild ride for many years."

PUBLISHER: Sterling & Ross

— Mark Jewell

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