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Personal Finance for Dummies
07 07 05  27  18
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Book Review: Personal Finance for Dummies, by Eric Tyson
This book covers almost every aspect of personal finance that a beginner
may need. Although it doesn't go into deep details on anything,
it does offers very specific recommendations for investment instruments,
publications, and tools -- something that most personal finance book
authors are too shy to mention. This book will certainly help
beginner investors get a general idea of
what is available to them. However, chances are the beginner will
need
to supplement this book with wisdom from external sources. The
book was recently updated to reflect new tax laws and to show examples
of real financial markets, including the stock market bubble of 2000
and the recent rapidly increasing home prices.
Like most dummy books it is designed in a way such that people who know
the subject or lack the time and attention span to read word by word
can quickly skim through the "tips" and "bewares".
Topics covered include: saving, spending, and debt management, basic
investment concepts, stocks, bonds, mutual funds, retirement planning
and retirement accounts, investment strategies, education expenses,
insurance, estate planning, real estate, and where to look for more
help.
There are some things on which I disagree, particularly:
- The author suggests bankruptcy as an easy exit from financial obligations.
- He also suggests paying off debt with savings, without spending
enough time explaining that under some situations you can get to
transfer the debt into low interest rate credit cards (7.9% fixed, for
example), and that this money could be invested in instruments with
higher expected rate of returns.
- He suggests you should avoid day trading or even individual stock
trading -- Although you should do so initially, both are viable
options. I do not day trade, and would not do it, but I am
certain that individual investors, armed with enough knowledge, time,
and patience can beat the markets.
In summary, it is a good book to get exposed to most of the financial
concepts you will need in life. Be prepared to supplement your
reading and investigate deeper on such topics you need to use now.
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