Personal Finance for Dummies

Personal Finance for Dummies

by Eric Tyson

Using worksheets, the book helps you to measure your own financial health by looking at factors such as how much debt you carry, your savings rate, as well as investment and insurance checkups.

The book looks at how you should invest your retirement account, approach taxes, and provides a good overview on how to buy real estate.

  • Series: Dummies
  • Language: English
  • Category: Economics
  • Rating: 3.77
  • Pages: 454
  • Publish Date: August 1st 2003 by John Wiley & Sons
  • Isbn10: 0764525905
  • Isbn13: 9780764525902

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I went from having a very basic, very vague sense of budgeting and saving to now getting a grasp on types of retirement plans, forms of savings, and am also getting a great introduction to investing. Before this book, even the words "retirement plans" and "investing" made me sort of worried and uncomfortable. It's easy to skip things I don't feel like reading about yet (buying a house, health care for the retired, etc.) and just zoom in on the most pertinent things to my life.

I spent the first 26 years of my life with absolutely no concept of personal finance. I have spent the last three years whipping myself into financial shape, and when I sat down and read Personal Finance for Dummies, I knew my transformation was complete. It provided a nice foundation for prospective homebuying, which is the whole reason I went "money mad." My wife looks at me with the same look Dr. Frankenstein gave his monster.

In that book, the author exposes a lot of the conflict of interest and hypocrisy that are inherent to much of the personal finance industry (financial planners, most of whom are actually broker/dealers, as well as popular gurus), but she recommended Personal Finance for Dummies as legitimate good advice. The best praise I can give this book is, "Boy, I wish I'd read this when I was in college!" I am grateful that my parents instilled in me such good money habits (for example, I've never intentionally carried a credit card balance), so I avoided most of the serious mistakes he rails against, but I would've felt so much more prepared and in control of my finances if I had read this before starting my career, and I would've improved some of my mediocre financial choices. - All mutual funds and almost all insurance and annuity products can be found in no-load (commission-free) varieties. - The best way to hire a money manager, for all but the very richest among us (i.e., the 1%, and if you're in the 1% you're probably not reading this book), is to buy low-cost actively managed funds.

Maybe when I'm ready to settle down this book will be useful, but as someone just scraping by, there's only so much you can do.

There is not a huge amount of detail in each one, and doesn't cover special scenarios (extremes of age or income, early retirement, disability), so I'd recommend reading this to ground yourself general and then picking up specialized books on topics of interest. AND I agree that if you're spending hours a month on the off chance that you will catch a bank error, that seems like a waste of time. In the case of Trader Joe's it sort of comes out of nowhere. - Twice in about ten pages Tyson recommends tapping your friends and family for money. He includes considering personal loans from your social network as one of many possible ways to attack high-interest debt, and then in the section on how much emergency fund you need, he includes a strong personal safety net of friends & family willing to bail you out as a potential reason you might be okay with a smaller emergency fund. Also, while I'm more on board with the down payment thing and the emergency fund thing, I really feel like you should address the reasons for your high-interest debt BEFORE you throw other people's money at it.

I have read a few financial texts in my life and have invested in mutual funds and 401Ks for a while, so I am not a complete novice, but this was a good refresher on the differences between investing in stocks and bonds, the difference between taxable and non-taxable securities, what you should/should not invest in through a 401K compared to what you should/should not invest in through a directly purchased investment such as a mutual stock fond or mutual bond fond. YOu can probably afford a deductible of $500 for your car insurance and you will spend a lot less every year in insurance (plus look at how much decreasing that deductiblew to $250 every year will cost you -- you might be amazed at how little sense it makes for you to carry that each year).

One of the costs of an intense career is time spent away from friends and family. You may indeed realize your goal of retiring early, but you mabe putting off too much living today in expectation of living tomorrow....Making and saving money is like eating food....The right amount, perhaps with some extra to spare, affords you a healthy, balanced peaceful existence.

Unfortunately, a lot of parents don't know many of the things found in this book or don't think to teach their children how to effectively manage their money."

I read this book when I was feeling like I should get to prepare for my future personal finances and possible debt.