Readers Question: 5 best personal finance books

Anonymous wanted to know,

What are your 5 best personal finance book?

Since, anonymous didn't leave a name, website or anyway to contact them, they couldn't win the workbook, but I thought the question was worth discussing.
In fact, the question was perhaps a result of a post that Saving Advice, recently did:
Books For Every Level of Financial Acumen. Jennifer Derrick listed 21 books for every level of financial knowledge.

With that in mind, I’ve put together my list of the best books for every level of financial knowledge. None of these are too obscure or old, so your local or college library is likely to have them or be able to get them through interlibrary loan. Failing that, you can probably find some of them at used bookstores. They’re also all available through Amazon.com, and some used copies are available from other sellers.

Some of her books, without question, would be in my top 5. However, are all of them? Well, lets take a look at the books I would list as my Top 5.

5. Miserly Moms: Living on One Income in a Two Income Economy by Jonni McCoy.

One of the earliest personal-finance books that I read. This is a book that didn't make it on Jennifer's list. However, it is a book well worth the reading. Especially, if you want to learn to more frugal, so that you can learn to make do on less.

4. Good Debt, Bad debt: Knowing the Difference Can Save Your Financial Life by Jon Hanson.

Another book, not Jennifer's list, but a book that I reviewed last year on this blog.
I am a loyal Dave Ramsey fan, who says that there is no such thing as "good debt." Still though, I have heard Dave say that if you do get a mortgage it is to be for 15-years or less. So with that in my mind I wanted to find out what Mr. Hanson called "good debt." As he sees it, "good debt" is debt that eventually increases your net worth.

3. The World's Easiest Guide to Finances by Larry Burkett.

Another book, that was one of the earliest books that I read. Although much more recently. I got this book, when I was on a spree of buying business/finance books on Ebay. It is obvious that it would be a book for the financial novice. I simply talks about Debt Reduction, Budgets, Insurance, Retirement, Investment and virtually all aspects of personal finance.

2. You’re Broke Because You Want to Be: How to Stop Getting By and Start Getting Ahead, by Larry Winget.

I thoroughly enjoyed this book. Understandably, Jennifer lists this book as one for the financial novice. It is simple to understand, and is straight talking.

. Larry is very no nonsense and a master of tough love. This book is a basic introduction to getting out of debt, but it will tear down every excuse you can think of and show you that it’s your choices that are making you broke. Warning: He is harsh (but funny), so if you get upset about that, maybe you should pass on this one.

1. The Total Money Makeover: A Proven Plan for Financial Fitness, by Dave Ramsey.

This is a book that Jennifer listed as a book for the financial novice.

I don’t always agree 100% with what Dave teaches, but there’s no denying that he is a great motivator and this book will get you fired up about getting out of debt and establishing a financial plan.

Not only will his books get you fired up, but so will his Live Events as well as his CD's and DVD's. There is no question, that This book is the number 1 personal finance book in my financial library.

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Review: How To Get Out Of Debt

Being in debt to a tune of around $12,000 (currently) with an annual earnings of about $19,500 (2007), I was excited when a promoter contacted me and asked me to review, "How to Get Out of Debt," by Harrine Freeman.

Reading her book, her story sounded a lot like my own, and for good reason. Freeman herself was once $19,000 in debt while earning $21,000 a year. However, she learned how to climb out of debt without filing for bankruptcy and shares her personal story and strategies that she's used for thousands of clients in her book, How to Get Out of Debt; Get an A Credit Rating for Free.

There are somewhere in the neighborhood of 30 million Americans who are in debt and receive bad credit ratings every year, according to the Fair Isaac Corporation (FICO). They have no idea how to get out of debt, and more than 1 million of these debt-ridden men and women file for bankruptcy each year. Now with this book, you can learn how to clean up your FICO score for free, without using one of those rip off "credit repair" places.

As a personal finance blogger, I have read a lot of books on this subject. Harrine Freeman recommends a method very similar to Dave Ramsey, in which one uses small and attainable goals. Pick the smallest debt you have, let's say it is $100, and pay it! That debt is gone, and you can move to next. Simply put you can 'Nickel and dime' your way out of debt.

It is a good concept, one that I myself am already using to get out of debt. The author recommends this method from her own personal experience. Much the same as personal finance guru Ramsey does. Freeman's debt, was from misuse of credit cards, used for fun rather then necessities. Which also means that this wasn't student loan or medical debt that plaques so many Americans. There are differences, however, between Ramsey and Freeman. For one, she seems to worship at the altar of the FICO score. Much of her book talks about rebuilding your credit. I do applaud her as she recommends staying away from the so called credit repair places. All they will do is take your money and give you empty promises.

She explained paying the minimum payment on the credit card means that you are going to pay for that item three times. In other words, that $5 coke and sandwich that you charge at lunch, will cost you $15. Is that scary or what? I know, some of you have thought I was crazy when, I have said the same thing previously in this blog. Perhaps, you should read this book and see what she has to say, for yourself. I really enjoyed it, and it really is a well written book without all those mind numbing calculations that so many finance books throw at you.

The book hit the shelves in November 2006, so you shouldn't have to much trouble finding it. You can easily find it by visiting Amazon.com.



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You're Broke Because You Want To Be

I recently finished reading, "You're Broke Because You Want to Be: How to Stop Getting By and Start Getting Ahead," a new book by Larry Winget. Winget, whose other books include "It's Called Work For A Reason," and "Shut Up, Stop Whining & Get A Life." He is probably best known as the star of A & E's "Big Spender. Winget is sometimes called the the pitbull of personal development, for his harsh, abrasive, in-your-face style towards personal finance.

Perhaps it is important to say, that in the introduction to his new book he makes a clarification between broke and poor.

Poor is a condition I find very sad. Sad, yet inevitable. Jesus Said, "The poor will be with you always." And they will....I didn't write this book for the poor people of the world. I know it is going to take a lot more than a book to help truly poor people....Broke is NOT a condition like being poor. Broke is a situation you find yourself in because you are either under earning or overspending. I can't fix poor, though I would love to. I'm good, but I'm not that good. I can fix broke....I will show you how, step by step.

I wrote this book for the average person who has a job, makes a living, and still can't seem to get ahead.

He points out what I have tried to say in this blog numerous times (even about myself). We may say we want one thing, but our actions contradict those words. Until we actually decide to make sacrifices and to actually but some real action behind our words, we are just talk. The idea that we must have all our fun now, without planning for our future is a great example of not putting our words into action.

Now before you get the wrong idea, this isn't positive thinking, instead, it is a nose to the grindstone, no excuses accepted and get it done. Exactly what I have been trying to say and encourage readers of my blogs to do.

The book was a hard-hitting no-holds-barred read. He says what needs to be said and doesn't except any excuses.

I quickly found myself described in several spots, but I didn't let myself be offended. Instead, I wanted to learn. I found the book hard to put down and eagerly filled out the workbook sections in each chapter. Admittedly, I could do without some of the language he used in the book, but it wasn't so over used that it was too much of a problem.

It is a book I would strongly encourage anybody who really wants to get out of debt to read. It will be an invaluable tool to your financial life and peace of mind.

I know, that he will be someone that I will be quoting as often as I do Dave Ramsey and John Cummuta.



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Book Review: Good Debt, Bad Debt

As I sat down to read and review this book titled Good Debt, Bad Debt by Jon Hanson, one thought was nagging at me. I am a loyal Dave Ramsey fan, who says that there is no such thing as "good debt." Still though, I have heard Dave say that if you do get a mortgage it is to be for 15-years or less. So with that in my mind I wanted to find out what Mr. Hanson called "good debt." As he sees it, "good debt" is debt that eventually increases your net worth.
In this book, he even lists what he calls good debt as:

• Earns its keep
• Increases your net worth or cash flow
• Secures a discount that can be converted to cash or net worth
• Creates leveraged position ($300 out, $400 in monthly)
• Examples: debt for real estate at a safely leveraged level, debt for education that can be applied for a return of capital, and debt for a business you are competent to operate.

The list then continues and list what he calls bad debt:

• Is typically for consumption
• Decreases your net worth or cash flow
• Examples: Car loans that rob your retirement fund, continuing credit card debt, living on student loans, furniture loans, loans for rapidly depreciating items, and loans for parties, weddings or vacations.

Like John Cummuta he compares credit cards to cocaine.

Credit card companies, perhaps taking their cue from drug dealers, send college students sample cards with credit lines of $500-$2,000 to hook new users.... They come to you without prompting-in fact, often with a premium just for signing up. T-shirts and cookies are common premiums on a college campus. Credit cards are the crack cocaine of the credit industry.

He even has what he calls "para-debt," or "almost debt." According to Hanson, this is the commutative effect of all the nonessential monthly spending. Even though these bills are not actually debt, it has a similar effect. Unlike normal utilities, these unneeded bills, like cable TV do not involve long-term contracts. In addition they are voluntary monthly obligations they can be cancelled at any time.

A bad debt is money owed on high-interest credit cards for trinkets and non-essential items. Bad debt gives temporary pleasure, such as driving a shiny new Jaguar off the dealer lot. "Dump the pride issues," he writes.

One thing was clear in reading "Good Debt, Bad Debt, Hanson despises Cars. He calls borrowing to buy a new car akin to driving your retirement into the ground. A car loan is a loan on something that decreases in value.

The average new car loses value at a rate of $250 per month or more in the first few years of service, he writes. "Cars are the easiest area to save money in," he says. Like Ramsey he strongly suggests buying less and driving it longer (IE: buy a beater). Save the difference, buy your next car with cash that you saved, preferably in a good mutual fund.

Hanson wants you to think before you spend and to deal with your financial problems head-on as they arise. "It is about gaining perspective and right-sized spending and saving," he writes.

He encourages readers to "avoid the consumer entitlement mentality that can only lead to debt, regret and broken dreams — not to mention a garage and basement full of junk." The goal: Get control of emotional spending.

Like Cummuta, he says that, "No matter the amount of your income, wealth can be obtained, or maintained, only through the amount you don't spend." The caveat is that it won't happen over-night like so many get rich quick schemers would like you to believe. It will take a number of years of spending less then you make. This is the key issue that Ramsey, Cummuta and Hanson all agree on. Yes, I believe, since debt is based on income, you can be debt-free with-in 7 years, if you start living with the just mentioned philosophy and focus on getting your debt paid off as Ramsey would say with gazelle intensity.

Today's actions will affect what you can do in the future. "Your spending will determine your ending," Hanson philosophizes.

Hanson wraps up this personal finance book with a chapter entitled. "You Married Who? The Ultimate Good Debt, Maybe." Unbridled emotions in any financial dealings can be dangerous, he preaches. Marriage, the ultimate financial partnership, must be entered with clarity.

To help, Hanson offers his checklist to help you and your fiance align your money and life philosophies before you say, "I do." But you will have to get the book to see the list.

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I will be giving away three copies of this book. The first contest will begin on Monday March 19. Entries will be submitted to that post on Monday. With the winner announced the following Monday. Anonymous posts will be disqualified. If you do not subscribe to the blogger service, you can choose "other," and type in a name that will identify you. Check back Monday, for the contest.


links to the giveaeays and winners:

Book Giveaway # 1 - Lauri
Book Giveaway # 2 -
Book Giveaway # 3 -