finance education

How to Pick the Personal Finance Book That’s Right For You

In 1997 I picked up my first personal finance book, The Millionaire Next Door. I had heard that the book revealed to the world that millionaires were cheap folks who drove old cars and didn’t send their kids to college. Nothing could have been further from the truth. In fact the book revealed to me the common qualities of millionaires and that becoming one is not that far fetched an idea. They have certain characteristics and habits and developing them is the surest way to join the ranks of the world’s millionaires.

Truthfully, personal finance books are a dime a dozen. You cannot roll a boulder without hitting one. What makes one book better for you than another? Since 1997 I have read 10-15 personal finance books per year. Well over 100 books later, there are only 10 who have made a genuine difference in my life. The rest were filler. At 10 dollars a book that is a lot to spend on filler.

How can you pick the right book for you and still keep your money in the bank? No, I am not just going to suggest that you get a library card. Wasting time on the wrong book is just as bad as wasting money. There are a few simple steps to follow that will help you pick the right book for the stage you are in life.

Ten action steps for selecting the right book for you:

1) Before you go to the bookstore or the library, decide what is most important for you at your particular point in time. Are debt elimination, starting a savings plan or investing most important for you?
2) Look for a book that teaches a new concept about an idea. In its first few pages, Rich Dad, Poor Dad introduced the balance sheet in simple, easy-to-understand way.
3) Look through the table of contents. Is there a chapter there that appears to address your problem? If so scan that chapter to make sure it contains information valuable to you.
4) Is there a glossary of terms? Or will you need to have your financial dictionary or Internet connection handy to understand your book?
5) Read the preface, does the author communicate his or her purpose for the book and is it in line with your personal philosophy?
6) Is the author’s language style appropriate for you? In the 1990’s personal finance books were written for baby boomers in their late 30s and older. The language was pretty staid. Today’s personal finance books are written for Gen x, Gen y, and Gen Whatever. The language style is more aggressive.
7) Is the book filled with exercises you won’t do? Be honest here. One of the main reasons that people don’t finish a personal finance book is because it is filled with exercises they won’t do. These exercises are very different from action steps, the steps designed to help you remedy your current situation. Exercises in personal finance books are often aimed at helping you figure out how desperate your current situation is. If you didn’t already know how desperate your current situation was, you wouldn’t be looking for a personal finance book in the first place. You need action steps not psychoanalysis.
8) What are other people saying about the book? The Internet allows any one to connect with book reviews. Folks are generally pretty open about their situations. Has the book you are considering helped someone in a situation similar to yours?
9) Is the book simply a rehash of something you have already read? Many financial books, especially books by the same author, are merely “also-rans”, books that rehash the same material repackaged for a different audience.
10) Is the book an end in and of itself or simply a promotional piece for a financial seminar? I cannot stress this enough. You are looking to solve your current financial situation through education not become part of some author’s marketing machine.

Once you master the basics there is much in the world of money mastery to know. Right now my focus is on books that teach new concepts about work, play and life. Just because I find a book intriguing I don’t run out and buy it. Instead, I place it in my queue and wait. I am always reprioritizing and looking at the materials I already have; if that book is relevant in 30 days, I will put it in my active queue to purchase and read.

Using the 10 steps I just outlined will help you gain the most book for your buck, avoid the unnecessary and redundant purchases, save you time and help you keep more of your money in the bank.

Category: Uncategorized