kate_nepveu: Personal finance education

Kate (

kate_nepveu) wrote,
@ 2009-04-18 12:30:00

Entry tags:

finance

Personal finance education

So it's past time for me to start getting a more thorough grounding in personal finance matters, as I met with some financial advisers yesterday and now want to start researching their recommendations. I've bookmarked The Financial Literacy Compendium at Get Rich Slowly (and am already contemplating moving our emergency fund out of our credit union's money market account into an online savings account). What other sites, books, etc., do you recommend? I'm not looking to micromanage our investing, but to get a big-picture sense of options, with an eye toward long-term planning.

Since our financial situation has a few uncommon wrinkles and I don't particularly want to discuss them in public, specific investment/planning suggestions are unlikely to be really helpful, but go ahead if you must.

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	daedala 2009-04-18 04:47 pm UTC (link)
	Personal finance stuff is one of my minor obsessions. I can provide lots of officious advice, if wanted. I've been very happy with ING. Their regular rates are not the best, though I've generally found their CD rates pretty good. I am also a Vanguard fangirl. Your Money or your Life is a great book on why. (Reply to this) (Thread)

	kate_nepveu 2009-04-19 02:13 am UTC (link)
	Thanks, I'll check that book out, and keep your comments on ING & Vanguard in mind. (Reply to this) (Parent)

	princessofg 2009-04-18 05:38 pm UTC (link)
	will be reading comments with interest. this last economic explosion caught us with our pants down and i vowed to never let that happen again. i've been trying to read up too. i subscribed to the Wall Street Journal as a beginning. (Reply to this)

vylar_kaftan
2009-04-18 06:02 pm UTC (link)

I love Suze Orman's books. She's been a terrific help.

I'm sorry, I don't know how old you are. If you're under 35, "Young, Fabulous & Broke" is unbeatable in terms of good advice for young investors. It's all general structuring things like, "Given my financial situation of x, should I pay off credit card debt or invest in an IRA?" Stuff like that. Some of it is too elementary (it would be a perfect book for a high school graduate) but most of it is still very applicable to the rest of us.

She has a book for women specifically on managing their finances, but I haven't read that.

Anyway, perhaps check into her books and website.

(Reply to this) (Thread)

montoya
2009-04-18 06:49 pm UTC (link)

YF&B was something of a curate's egg, I thought. There's some good advice in there, but also some really dubious stuff -- telling you not to make a budget is awful advice, and telling you to pay off your mortgage early "but only if you're planning on staying there a while" adds a bizarrely irrelevant qualifier to otherwise sensible advice.

And there's generally kind of a focus on the trees instead of the forest. Like when it comes to credit cards, she'll say that yeah, you should really pay them off... but she spends far more time talking about how to juggle balances between cards with different rates to keep your fees low. And she goes as far as to say that your FICO score is the single most important topic in personal finance, which is very strange advice.

That said, most of her advice ends up being relatively decent, and people could certainly do worse than to do what she says; but I think that in attempting to relate to (how she perceives) "young people," she ends up muddling more than clarifying.

(Reply to this) (Parent)(Thread)

rilina
2009-04-19 01:42 am UTC (link)

I've liked Orman's books, though I don't quite fit into the precise target audiences of YF&B or Women & Money. She is a bit grating on tv and to a somewhat lesser extent in her books. If that helps her get through to you, that's good. But for people who are already ready to accept personal finance basics about spending and saving and don't need Orman's particular schtick to get started, I think there are better alternatives.

(Reply to this) (Parent)(Thread)

vylar_kaftan
2009-04-22 01:50 pm UTC (link)

Possibly so. I thought she was funny in sort of a "tough mom love" way. What I liked most about her book was the Q&A format, so you could easily read the sections that applied to you and skip ahead for the ones that didn't.

It doesn't hurt to pick up a couple of books and see which ones help most.

But as others are saying, there's a few consistent basics. They include:

--Diversify your investments so that a single catastrophe won't wreck you (like the people who bought only Enron stock...)
--Save as much as possible, and think long-term. Start your IRA as soon as possible and put as much as you can into it (under legal limits of course).
--Avoid debt whenever possible and protect your credit score and report.
--Be thrifty and look for less expensive alternatives to things.

That covers probably 60% of the basics. :)

(Reply to this) (Parent)

	kate_nepveu 2009-04-19 02:14 am UTC (link)
	I am under 35, thanks, and I'll take a look. (Reply to this) (Parent)

montoya
2009-04-18 06:37 pm UTC (link)

1. My recommended starting point is the cheekily-titled Andrew Tobias' The Only Investment Guide You'll Ever Need. It's short, breezily readable, full of sensible advice, and very focused on the forests and not the trees. At times, Tobias gets a bit silly with the advice for thrift -- cut your own hair to save money! -- but he does so in a jovial, kind of winking way. (His partner is a fashion designer, and you can practically hear the cringing through the pages.)

2. Alternately, Burton Malkiel's The Random Walk Guide to Investing is also highly recommended. It's slightly more sober (though still very readable), and more narrowly focused on investing specifically (as opposed to exhorting you to save, and how to budget, and that sort of general topic).

Its advice ends up being similar to Tobias' -- it has to be, or it wouldn't be any good -- but it's got a bit more rigor to it. (Tobias, when making the case for index funds, points you to the classic work on the subject... Burton Malkiel's A Random Walk Down Wall Street. Malkiel, when making the case, makes the case.)

(Reply to this) (Thread)

	rilina 2009-04-19 01:45 am UTC (link)
	I skimmed and liked the Malkiel as well; it's very solid. And was a good choice for where I am personally with money. I get the basics of short-term saving and budgeting and have implemented things as needed. But investing and retirement savings make my head hurt. (Reply to this) (Parent)(Thread)

	kate_nepveu 2009-04-19 02:06 am UTC (link)
	Ah, those are particularly things I want to know about, so that's good, thanks. (Reply to this) (Parent)

	kate_nepveu 2009-04-19 02:15 am UTC (link)
	Thanks, I appreciate it. (Reply to this) (Parent)

	montoya 2009-04-18 07:01 pm UTC (link)
	Also, I like Mint.com for budgeting. If your expenditures are all done via credit card or bank account, it's very easy to set up a budget and track them there for free. I find it to be better and easier than Money/Quicken for that purpose, largely because it's so minimalist and focused. (Reply to this) (Thread)

	kate_nepveu 2009-04-19 02:15 am UTC (link)
	But if I'm already balancing our checkbook through Quicken . . . ? (Reply to this) (Parent)(Thread)

montoya
2009-04-19 02:23 am UTC (link)

Well, I switched from Quicken to Money to Mint, but wouldn't automatically recommend it to everyone. Mint doesn't have a lot of the features that the desktop software has, but because of that (and because Intuit and Microsoft are basically running Quicken and Money on autopilot-milking mode, so haven't updated their UIs in a major way in many years), it's actually easier to use and easier to see your status with monthly budgets.

But there's a lot of stuff Quicken can do that Mint can't (such as tracking hand-entered transactions -- Mint can only deal with what it automatically downloads), so it's entirely possible it won't work for you at all.

It's free, and if you have 20 minutes that you want to dedicate to giving a website all the account numbers and passwords to all your financial information, it's easy enough to try.

(Reply to this) (Parent)(Thread)

kate_nepveu
2009-04-19 02:34 am UTC (link)

I didn't find Quicken very easy to start, but since I have everything set up and since, as you suggest, I prefer to keep *some* things offline . . .

I've just done a quick monthly budget and while I can't easily break out what we put on our credit cards, which would be a help, the rest of our bills are few and consistent enough that I feel okay with the back-of-the-envelope thing.

But I'll keep it in mind.

(Reply to this) (Parent)(Thread)

	montoya 2009-04-19 02:36 am UTC (link)
	When you say you can't break out what you put on your credit cards: Are you not downloading the transactions? (Reply to this) (Parent)(Thread)

kate_nepveu
2009-04-19 02:40 am UTC (link)

No.

One of them is from our credit union, and I have shit luck making Quicken deal with multiple downloads from the same bank--yeah, I could manually export it, but since the only benefit to this would be that I could break out what I put on it--if we get to the point where we need to do serious cuts in our spending, that would be the place to look, but otherwise I don't see the point.

(Reply to this) (Parent)(Thread)

	montoya 2009-04-19 02:46 am UTC (link)
	I guess it depends on how fine-grained you want to be. I want to know what gas and groceries and what-not cost, and if I didn't have the credit card broken out, I'd have no way of knowing. (Also, that kind of insane flakiness was part of what drove me away from Quicken/Money. It's amazing how many just obvious bugs they have.) (Reply to this) (Parent)

rilina
2009-04-18 08:11 pm UTC (link)

I would second the rec for Your Money or Your Life by Dominguez and Robin. For blogs I also like The Simple Dollar and (a little less than GRS and SD) Wise Bread. Apologies for lack f links; am posting from phone.

With all personal finance books there are some basics most authors agree on. The rest is opinions on details. Having read blogs and books on this for the last couple of years, I am not coming across much new to me content now.

(Reply to this) (Thread)

	daedala 2009-04-18 11:08 pm UTC (link)
	Yeah, agreed. Not much new any more. :( It's fairly simple, just not easy. (Reply to this) (Parent)(Thread)

montoya
2009-04-19 02:49 am UTC (link)

It's sort of the downside to having personal finance as a hobby, because there's only like so much useful information you can actually have, and then a bunch of noise.

I always find it amusing that even the financial gurus who are sensible about index funds 'n' such will still end up buying individual stocks and obsessing about their gyrations. People just want to play and get really into it, no matter how much they know it's not "sensible."

(Reply to this) (Parent)

	kate_nepveu 2009-04-19 02:16 am UTC (link)
	Glad to hear that there are some agreed-upon basics, since there ought to be! (Reply to this) (Parent)

	lundblad 2009-04-20 03:43 am UTC (link)
	Mint is awesome. I feel like I can't live without it anymore. They are basically aiming at destroying Quicken, and stealing all their users. And it will only get more features. (Reply to this)

(24 comments) - (Post a new comment)

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