Accounting

I bought the video version of this same title back in the 80's along with Psychology of Success by Brian Tracy. In a world of fast talking, self serving promoters, it is refreshing to use the work by a master like Brian Tracy. Brian Tracy may be a new name to many of you even though he is the #1 best selling author of training programs for Nightingale-Conant and has been conducting seminars and producing audio/video training programs since 1983.My income has grown by more than 10 times as a result of following Brians ideas. I highly recommend this book and the video by Tracy. Psychology of Success and Psychology of Achievement are must listen to audio programs.Maximum Achievement is a must read book as well. Brian is the best.

This was the first of a long string of Financial Success books that I have read in the last 18 months. I saw an ad for it and thought, "what the hell?".

The book won't let you down. The title may sound VERY CHEESEY, but please dont let that fool you. You can't really argue with anything he says. In fact I'm sure if you followed Mr Tracy's recommendations you just can't go wrong.

The audio starts out with Dream Big Dreams and Develop a Clear Sense of Direction. These are my favorite chapters. I hit review for these two tracks on my CD player all the time. I think, just as Mr. Tracy, you GOTTA think BIG! And you gotta make a plan. This book will motivate you, take my word for it.

My only complaint is that Mr.Tracy does not discuss the Mastermind concept in the chapter on Getting Around the Right People. I still give it 5 stars.

I like this book and certainly learn a lot from it. I actually use what is mention in this book as a checklist (add some other "criteria" of my own which i think is important to me) to guide my everyday bahavior. Some particular "secret" mentioned did have very positive impact on me life.

Concise, simple, clear, positive and practical despite it size. A thin book. One only need to invest very little time to read, but the return is well-worth.

This book covers the 25 myths about managing money. What makes this book better than others is that it gives you the background logic behind the decisions. For example, the author discusses the myth of buying the biggest house possible and why this mindset was successful in the 70s & 80s (and could be again) but isn't a good idea in today's economy. The author further shares the "forumula" behind the logic -- inflation rates, present/future value of money, and lost opportunity.

The 25 Myths are nothing surprising, but you will find that the logic is refreshingly simple and easy to apply to your financial situation.

The best book I have read on financial planning strategies and tactics. If I had my own financial planning business, 25 Myths is the one book I would give to to clients to explain the basic rules to follow in implementing a successful financial plan. I enjoy reading Jonathan Clements's Getting Going columns in the Wall Street Journal. Don't worry his book is not a rehash of his articles, although many of his ideas and recommendations are familiar from reading his column. He takes 25 familar financial myths and explains how each myth arose, where we go wrong in following those myths and what the new rules are. Myth: Stocks are risky. Reality: Stocks are not risky compared to the risk you suffer from inflation if you concentrate your money in safe investments like bonds. Myth: You can beat the market. Reality: You can't beat the market but you can cut the costs by using discount brokers, no load mutual funds, low cost funds, and income tax efficient funds. Clements recommends keeping 80% of a person's investments in stocks (which shifts to 60% as you approach retirement). To ensure that upon retirement a person has a cash balance Clements offered the tactic of using zero coupon bonds to fund the cash balance for retirement. So long as one focuses on the maturity value in retirement, the possible fluctuations in value of zeros doesn't matter. I also liked his analysis of inflation indexed bonds as way to hedge against inflation and interest rate fluctuations. I will list the myths here because the book review does not list the table of contents: 1. You can have it all. 2. Get a good job and you'll be set for life. 3. Stocks are risky. 4. You can't go wrong with IBM. 5. You can beat the market. 6. Your investments will make 10 percent a year. 7. You can't go wrong with mutual funds. 8. You can find the next Magellan. 9. Index funds are guaranteed mediocrity. 10. Nothing's safer than money in the bank. 11. If you need income, buy bonds. 12. Hedge your bets with hard assets. 13. You should own a balanced portfolio. 14. You need a broker. 15. Keep six months of emergency money. 16. Debt is dangerous. 17. Buy the biggest house possible. 18. You can't beat the mortgage tax deduction. 19. Invest in your house. 20. Trade up as soon as you can. 21. Protect against every disaster. 22. Life insurance is a good investment. 23. Invest in your kid's name. 24. Max out your IRA every year. 25. One day, kids, all of this will be yours.

"25 Myths You've Got To Avoid If You Want To Manage Your Money Right" is a great personal finance book. The book gives a solid overall philosophy to managing your money. It's probably best for new to intermediate investors.

Each chapter begins with an investment or personal finance myth. Clements explains where each myth goes wrong and concludes each chapter with new rules to replace the myth.

Clements discusses the myth that you should invest in bonds for income. He says that investors love bonds because they love income. But, Clements says that investors loving bonds is a "masochistic relationship" when we factor in all of the negatives of bond investing.

Clements explains that the callable feature of bonds means that if interest rates drop significantly, bonds will probably be called in, depriving investors of the desirable and higher interest rate on their existing bonds. But, if interest rates shoot way up, the bonds won't be called in, and investors will be locked into receiving a low rate of return. Clements says that the call feature of bonds is a case of "heads I win, tails you lose."

And, as much as investors love bonds, Clements notes that the taxman loves bonds even more. After factoring in taxes and inflation, Clements shows us that bonds are a dismal investment. (Especially when we toss in default risk and interest rate risk). The chapter about bonds is particularly good and will give investors much to think about.

So, what about investors seeking income? Does Clements go along with the "No problem. Just sell some shares when you need some money" crowd? No. Clements realizes the inherent risk in needing to sell shares for income. The market might be down, and you could take a clubbing.

Clements explains that stocks or mutual funds holding stocks "are your portfolio's engine of growth. Everything else is there to reduce risk, so that you won't get unnerved by market swings and can tap your portfolio for spending money without selling stocks at fire-sale prices."

So rather than following the conventional advice of holding a portfolio balanced between stocks and bonds (usually 60% stocks and 40% bonds), Clements suggests investors consider holding a portfolio of 25% cash and 75% stocks. I strongly agree that this is something to consider.

Ultimately, Clements tells us that it's our asset allocation which will determine the long-term rate of return our portfolio achieves. Rather than holding a portfolio composed of only 50% stocks and then trying to seek the next Microsoft, investors would probably do much better holding a higher percentage of stocks and foregoing the search for the next big winner.

Clements says it's a myth that you can beat the market. In addition to not liking market timing, he doesn't believe in sector rotation, or individual stock selection. Further, Clements doesn't tend to like actively managed mutual funds. Because Clements is of the earliest columnists to cover the mutual fund industry for The Wall Street Journal, we should probably listen when he gives mutual fund advice.

What typically happens, Clements explains, is that a superstar fund manager hits a streak. This might be due to his or her investing style coming into favor or it might be due to luck. Then typically the public relations department of the money management firm kicks in and the money under management balloons. Ultimately, the fund returns to moderate performance or bombs entirely. The superstars reputation fades away. A new superstar at another fund is born.

Clements has seen too many superstar fund managers wipe out to believe it's worth his time seeking the best mutual funds among the several thousand existing funds. He recommends indexing your stock market money among larger U.S. stocks, smaller U.S. stocks, and foreign stocks.

Clements includes a good discussion of the controversy surrounding whether to invest all of a lump sum at once or whether you should dollar cost average it into the market. He prefers dollar cost averaging it into the market as a means of reducing risk. Rather than aiming for the highest possible return, we want to minimize the risk of losing capital.

Clements says we probably won't get a 10% rate of return on our investments and that the new "Disney World for the post-teen set" is using compounding calculators, plugging in estimated rates of return, to calculate how large their retirement nest egg will be. Considering inflation, Clements corrects us showing that, due to inflation, the real return on stocks is closer to 7% a year. Those compounding calculators are fun, aren't they?

I disagree with some of Clements' advice. What he says about building a credit cushion rather than holding excessive savings in a low-yield, money-market fund is good. But, I'd much rather count upon a home equity line of credit than a (gulp!) margin account at a brokerage, which he suggests as an option.

Clements also suggests that if you're wealthy you probably don't need umbrella liability insurance as you can self-insure this risk. He says the same about health insurance. How rich is rich? We're not talking $5 million here. I'd recommend retaining both health insurance and umbrella liability insurance regardless of your wealth. But, as Clements says, you probably can forego termite reinfestation insurance. You can absorb the cost of annihilating the little bugs yourself.

Finally, "25 Myths You've Got To Avoid If You Want To Manage Your Money Right" has a great discussion of why you might not want to max out your (non-Roth) IRA, but consider holding a global index portfolio in a taxable account instead. In addition to not having access to the money for a long-time, you're converting capital gains into more heavily-taxed income with the non-Roth IRA.

Peter Hupalo, Author of "Becoming An Investor"