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Saturday, May 10, 2008

Book Review - The Money Book for the Young, Fabulous, & Broke (Part 1)

I'm always looking for new things to blog about, and while rearranging some shelves last night, I decided that perhaps some personal finance book reviews might be a nice addition. If nothing else, it never hurts me to go back through these books in detail.

The first book to be reviewed is The Money Book for the Young, Fabulous & Broke by Suze Orman. As you may have noticed, I've listed YF&B as one of my favorite PF books over on my sidebar. This was really the first PF book I read, upon suggestion of a friend. She raved about the advice contained within, so I decided it was time to check it out.

As can be gleaned from the title, the book is aimed at what is being termed "Generation Debt," those of us between 25 and 35. Do you need to be broke for this book to work for you? I don't think so. I wasn't even in credit card debt when I picked up the book, and I already had an emergency fund in place. Sounds like I was in a great financial position, right? Well, not really. I didn't know how to plan ahead. I didn't know anything about Roth IRAs, and I wasn't sure how to best look at retirement, when it's decades away. I don't know enough about mortgages or investing. This book explains all of that and more. Sure, there are sections that perhaps don't apply to me, but I still recommend this book to all of my friends. It answers questions for people just starting out, and for those who have been working for a while, but feel like they're not working towards a goal.

This book is arranged very simply, with a new topic each chapter. Each chapter starts with The Lowdown. This section features very clearly presented information about what you need to know about that chapter's topics. Some of these sections are more detailed than others, and I found myself reading and re-reading the section on investing, just to be sure that I understood every bit of it. The next section is called Strategy Sessions. These are set up in question/answer style, with a problem, a solution, and then details on how to actually achieve the solution. Finally, the chapters end with the Playback section. This is a bulleted recap of what you need to do for the topic discussed in that chapter.

The book includes a code that you can use to sign up for the YF&B section of Suze's website. I think this is a really great feature of this book and of many other of her books. The website features a number of resources designed to work with the YF&B book. The first is an action plan. For many YF&Bers, being faced with all these things that they need to do in regards to their finances can be overwhelming. In her book, Suze breaks these things into Action Steps, but if you read the book in one sitting, you will find yourself faced with a number of Action Steps. That's where the website comes in. You answer a few questions about your current situation and the site sets out Action Steps for you. You can't move to the next one until you complete the one before. This is an easy and simple way to prioritize.

The site also features book updates, which I find crucial for personal finance books. Things change! The site currently only has three additions/corrections to the book, but I still feel much more comfortable knowing that someone is tracking the book for changes.

Throughout the book, you will find references to Resources available online. The resources section covers information on student loans, retirement and Roth IRA information (including suggestions on where to open and what to invest in), funds and ETFs, home buying, and much more. I found this section very helpful when looking at opening a Roth IRA. I knew that I should be looking for a discount broker or no-load funds, and that at least for now, I wanted to invest in index funds. But even knowing that, I still didn't know where to go. Suze doesn't tell you where to go. But she does provide a list of discount brokers and no-load fund companies. It was a great place to start.

Additionally, there are a number of PF calculators and a forum for questions. I admit that I haven't really used either of these features, but it's nice to know they're there.

So that's the intro to YF&B. Next week, I'll start my discussion of Chapter 1.

1 comment:

asgreen said...

This was the first money book I ever read also. When my sister graduated college, four years later I gave her my copy as a gift. She said it really helped her to start thinking about money and the future and even started investing in her 401K before I did!