Title: "The Truth About Money: 4th Edition"
Author: Ric Edelman
Publisher: Harper Business, 2010; 736 pages; $19.99
Money matters rank at the very top of most Americans’ New Year’s resolutions lists. In fact, a recent poll conducted by the National Foundation for Credit Counseling found that reducing debt was the No. 1 resolution set by respondents — 69 percent said this was their top mission for 2011.
And when it comes to finances, people tend to set big, sweeping goals rather than to set a smaller list of easily attainable aims. Rather than "pay off Visa," people tend to aim for "paying off their debt"; instead of "setting up autodeposit into savings account," many resolve to "save and invest more."
Many behavioral and finance experts point out that big, sweeping goals are less achievable. Nevertheless, at this time of massive money missions, it is perhaps appropriate that Barron’s financial adviser and radio personality Ric Edelman has just released the fourth edition of his big, sweeping title, "The Truth About Money."
Now when I call this book big, I mean it is massive, in size, scope and substance. "The Truth About Money: 4th Edition" offers nearly 700 pages (no typo) of financial education in a comprehensive primer on topics ranging from financial planning, to investment vehicles, to real estate to estate planning.
Not only is this book massively long, readers will find it to be massively useful. Whether you are that person who either knows nothing about money matters and has decided to get in the know, or you are already money-savvy and looking for a comprehensive reference guide at your fingertips, this is your book.
Even the tables — yes, multiple tables — of contents are tailored to help you find what you need in this behemoth of a book, whether you know what you need or not! There’s one table organized to guide longtime lovers of earlier editions through all the new material in this edition, from a talk about timeshares to Edelman’s coverage of continuing care retirement communities. There’s another one that helps you find your way through the book on the basis of your life stage, financial situations and even demographics like gender and age.
Personal finance is a meaty topic that could never be comprehensively covered in a pocket book, but this book’s user tools eliminate the daunting nature of the prospects of wading through such a tome, from its very first pages.
Edelman starts at the very beginning, with Part I, an "Introduction to Financial Planning," which briefs readers on all the reasons they need to take financial planning very seriously, then covers obstacles to building wealth, explains taxes and inflation, sings the praises of compound interest, and explains the powerful reasons to stop procrastinating when it comes to saving and investing — quick like!
Parts II through VI offer even the totally uninitiated a basic, yet complete, education on traded assets, from the capital markets, to fixed-income investments (e.g., bonds and CDs) to equities (think: stocks) and packaged products (like mutual funds) — then helps readers understand and select the right investment strategy for them.
Next, Edelman zooms out a bit to provide a firehose-force shower of individual financial strategies for a wide variety of financial challenges a reader might face across her lifespan, from job loss to funeral costs.
Part VIII is a deep dive into housing offering Edelman’s take on sound strategies for "Buying, Selling and Owning Homes." Edelman’s BLT (Big Long-Term) mortgage strategy might be controversial to those who espouse achieving financial security by paying their homes off, but he does articulate a good argument for alternatively investing the cash to achieve higher returns than the interest saved by an early mortgage payoff. He also pushes readers into taking a long-term view of their mortgages and housing obligations, which is never a bad thing.
The other sections — "Tax Strategies," "Retirement and Estate Planning," "Insurance" and "Selecting a Financial Advisor" also all get appropriate shrift, so to speak.
To make a long story short (pun completely intended), this book is like a layperson’s version of the Physician’s Desk Reference for money matters. Yes, there’s a lot of Edelman’s professional opinions and strategies inside, but most of it is unobjectionable, and the bit of controversial material in there is in no way sleazy or even sales-y.
The vast majority of the book is simple education and Edelman’s blunt and occasionally entertaining admonitions to make the basic money moves that create financial security wealth, like planning, saving, investing and strategizing. Financial novices and money mavens alike will value this guide.