Book Review
Title: "How to Invest $50-$5000: The Small Investor’s Step-by-Step Plan for Low-Risk Investing in Today’s Economy"
Author: Nancy Dunnan
Publisher: HarperCollins, 2010; 272 pages; $14.99

We Americans eagerly await any investment tip uttered by Warren Buffett, and voraciously consume information about the strategies used by hedge fund titans and investment bank moguls. But the reality is that the vast majority of those of us who have funds of our own to invest are working with sums closer to $50 than $50 million.

Those oodles of zeroes are tossed around so carelessly in the financial media that many who come across an extra hundred bucks think they’re better off using it to de-stress with some retail therapy than to bother trying to "invest" such a small sum.

But according to financial adviser Nancy Dunnan, the author of "How to Invest $50-$5000: The Small Investor’s Step-by-Step Plan for Low-Risk Investing in Today’s Economy," that just ain’t so.

For 2010, Dunnan has published her 10th edition of this uber-usable book at a time when small sums are all most people have, creating both hope for the future and an immediate set of action steps for small investors at all levels to get some mileage out of whatever cash they do happen to have at hand.

In fact, Dunnan’s introductory message pervades the book: No amount of money is too little to invest.

Dunnan’s mastery of the behavioral and financial elements of personal finance is evidant throughout the book. She insists from the beginning that readers save something — anything — from their very next paycheck, if only to get into the habit of saving. She also provides a set of the "10 Dumbest Financial Mistakes People Make," so readers can spot their own "issues" and begin building momentum to correcting them, stat.

The "Mistakes" section and the evergreen yearly financial calendar in the first chapter are, by themselves, worth the cost of the book. Their easy-to-follow, uncomplicated format provide bite-sized, non-scary, crystal-clear action steps of the precise sort that empower even the worst of financial procrastinators to do something different than they’ve been doing for years.

Move your emergency fund from a bank savings account to a money market account or an online bank one week. Consolidate those 10 different accounts you have all over town into three the next week. Got a windfall you’re scared to invest? Break it down and make three smaller investments — Dunnan tells you where — over several weeks.

At the $50 level, Dunnan’s advice focuses mostly around becoming conscious of bank fees, interest rates and yields, and being more strategic about which "institutional cookie jar" (bank) you select to stash your cash. She also provides primers on credit unions and savings bonds for those trying to do something smart with 50 bucks.

For those at the next level, who have around $500 to invest, Dunnan still focuses on highly liquid, but interest-bearing, accounts, like interest-bearing checking and money market accounts, certificates of deposit (CDs) and mini-investor plans (she gives links!), treasuries and investment clubs.

At the $1,000 level, Dunnan encourages readers to dive into tax-advantaged retirement plans, like IRAs and 401(k)s, the different flavors of which she details in one of the most clear explanations I’ve ever read (and she gives even more links!).

For those with $2,000 to $5,000 to invest, Dunnan goes all out, providing specific recommendations about classes of stocks and funds that make sense for these largest of the small investors, as well as offering a roadmap to the research resources we need to consult before making such an investment.

Her appendices are mini-treasure chests filled with unique advice on a generous handful of important subjects, like where to get cash in a crunch, how to come up with college funds, and scams to avoid, what to do if you get fired or laid off, and Wall Street-speak translated into plain English.

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