Tuesday, April 26, 2011

Wealth Within Your Reach, Pera Mo, Palaguin Mo!



About the book and its Contents

This 200+ page book is one of the simplest and most understandable works you can buy in the bookstore. Each of the chapters are discussed in both English and Filipino and focuses on the basics. It first narrates a story of a success turned failure; then it discusses the financial life stages; reasons to understand personal finance; financial independence; its obstacles and allies, and many more. The second part explains several commandments that you must follow in order to reach your personal finance success. 



Review
For those who are intimidated by a combination of the English language and any financial jargon, this is the book that you must buy. If you are interested in the basics only, then this is the only book that you will need to hold and remember.


Difficulty Level = 1/5

This is a very easy read. You can finish it in less than a day, if you devote enough time for it.


Personal Rating = 5/5
The topic of personal finance is very much simplified in this book.



Personal finance tip for today:

Though buying books costs money and does not bring you back money directly, it does however, improve your skills and knowledge, which can help you spot and utilize opportunities for greater income.


Recommended links:

Wealth Within Your Reach; Pera Mo, Palaguin Mo!

Monday, April 18, 2011

Why Smart People Make Big Money Mistakes and How to Correct Them



About the book

Ranging around 200 pages, this book is an application of behavioral science theories in relation to why people make mistakes when it comes to finance and investing.


Contents

Several theories are discussed in great detail in the book. These include: mental accounting, loss aversion, sunk cost fallacy, status quo bias, endowment effect, money illusion, bigness bias, anchoring, confirmation bias, overconfidence, and information cascades. The last chapter provides steps the reader can take to avoid those big mistakes and prevent losing money in the future.


Review
 
This is an easy-to-read and insightful book. Not only will you learn about mental behaviors that affect your finances; you will also learn how to spot if you have them, and what you can do to learn from them. 


Difficulty Level = 1/5

This is a good book for everyone interested in both finance and some psychology


Personal Rating = 5/5
 
This is a  highly recommended light reading


Personal finance tip for today:


There is no need to cut up your credit cards. To maximize your credit payment terms, make use of your card the day after the cut-off date. That way, the purchases will be included in the next cut-off instead, and you have a longer payment due date. Also make sure to always pay in full on or before due date. Interest from credit cards are very high.


Recommended links:

Monday, April 11, 2011

The Millionaire Next Door



About the book

These are the results of detailed studies and observations conducted by Thomas Stanley and William Danko, who both have doctoral degrees. Their study shows the surprising characteristics of a good number of American Millionaires. This book does not aim to make simple generalizations of ALL wealthy Americans but instead explains in detail a list of seven common behaviors or factors for a substantial number of them. 



Contents

The book discusses in detail the seven factors that made wealthy Americans into who they are now, financially speaking. Some of these include: 1) they live well below their means, 2) they believe that financial independence is more important than displaying high social status and; 3) they chose the right occupation. Each chapter provides detailed statistics, examples, and results of the surveys they have conducted, based on a representative sample size.


Review
 
While some behaviors described in the book may not fit or describe accurately the behaviors of other wealthy individuals, it does teach us the important characteristics or traits that have made a good number of people comfortably wealthy. It is up to the reader to decide if he or she is up to the task of applying the same principles in his or her life. 


Difficulty Level = 2/5

This is an easy-to-read work. It is not as difficult to read as compared to a dissertation or thesis.


Personal Rating = 4/5
 
If you are more interested in reading about real people successfully applying some of the personal financial planning concepts/tips, then you should read more about this book.


Personal finance tip for today:

To live below your means that you earn more than what you spend. This does not mean that you have to live miserably. It is all right to spend on some luxuries and enjoy life so long as you still save a substantial percentage of your income and not use up those savings. 



Recommended Links:

Tuesday, April 5, 2011

The Alchemy of Finance


About the book

This is one of another Wiley Investment Classics books on Investments. This 392 page work is written entirely by George Soros. For those who do not know him, he is one of the top investors in the world and also a billionaire. He is also proclaimed as 'The Man Who Moves Markets' because at one time, he made a billion dollars in gains by betting that the British pound would be devalued (and it did).



Contents

This book is separated into five parts. Part one discusses Soros' view on several theories, most notably on the Theory of Reflexivity, in the stock markets and in the currency markets. Part two focuses on Soros' views on several historical events, which include the international debt problem of America, and Reagan's 'Imperial Circle' among other things. Part three discusses Soros' personal experience and reflections regarding his Quantum Hedge Fund's performance starting from August 1985 and ending at November 1986. Part four meanwhile, is his evaluation of his performance. Finally, part five discusses Soros' own prescriptions between: free markets vs. regulation, an international central bank, systemic reform, and the market crash of 1987. 


Review
 

Soros is a brilliant thinker aside from being a successful investor and philantropist. His insights are profound and can be difficult to understand, due to the language he uses. It is much like reading a philosophy book, which it seems to be. It is an intense reflection on certain realities and experiences.


Difficulty Level = 5/5

This is a challenging book to understand. It will probably take more than one reading to understand his point of view.


Personal Rating = 3/5
 
Although a good book, investors who are at beginner's level should not read this book just yet. There are other works available that can offer more practical advice and tips.


Personal finance tip for today (new feature) 





Upon the suggestion of some readers, I will be inserting very simple and practical personal finance tips every time i make a book review, so as to spice up the blog. Here goes:


In order to save money faster, stop borrowing money with interest rates. Unlike a corporation, your interest expenses are not tax-deductible.



Related links: